‘Today I am pledging to cut the deficit in half by the end of my first term in office,” President Obama boldly declared on February 23, 2009. He added that this “means taking responsibility right now, this administration, for getting our spending under control.”
Among Obama’s parade of disappointments, this vehicle may be the most dangerous.
Obama was inaugurated about a third of the way through fiscal year 2009, and that year’s deficit totaled $1.41 trillion. Had he halved this shortfall, FY 2012’s deficit should have remained below $705 billion. Instead, it was $1.1 trillion — $395 billion (56 percent) above Obama’s pledge.
Under Obama, America has made history: four consecutive annual deficits surpassing $1 trillion. After FY 2009’s $1.41 trillion hole (which he and an all-Democratic Congress could have filled), the next three deficits were, in chronological order, $1.29 trillion, $1.3 trillion, and $1.1 trillion. Thus, Obama has swelled the national debt by at least $5.1 trillion — all in one term. Another record. (See chart.)
As The Weekly Standard’s Jeffrey H. Anderson recalls, Obama predicted in May 2009 that FY 2012’s deficit would be just $557 billion. Obama misunderestimated the depth of last year’s red ink by almost exactly half. Never take a diving lesson from this man.
Obama’s massive misjudgment confirms his profligacy and incompetence. The least a president should do is forecast accurately the pace at which he spends the nation into oblivion. Obama cannot manage even that.
Obama’s stunning lack of leadership fuels this catastrophe. Budgets are key to controlling spending. Nonetheless, while the Republican House of Representatives has passed two budgets, Obama has permitted the Democratic Senate to violate the 1974 Congressional Budget and Impoundment Control Act by refusing to endorse any budget whatsoever. Like an equatorial backwater patrolled by feral chickens, the United States of America has not adopted a budget since April 29, 2009.
Even worse, Obama has not exercised enough muscle to earn even one congressional vote for his latest budget. It failed unanimously, with every voting House and Senate member, Republican and Democrat alike, giving his blueprint a thumb down. The House killed Obama’s proposal 0–414. The Senate followed suit, 0–99. That Obama could not convince even one of Congress’s 535 members to support such pivotal legislation represents a canyonesque low in presidential ineptitude. How appropriate for a man who has driven America off a cliff, and still floors the accelerator as the nation speeds toward the jagged rocks below.
Obama also inculcates a culture of spending. If he tightened his belt, and demanded accountability among federal employees, Washington might emulate his model. Instead, the bacchanal roars on. Among infinite examples of this obscenity:
‐ The U.S. Department of Agriculture (USDA) gave an Idaho company $300,000 to promote caviar consumption.
‐ The National Science Foundation shelled out $350,000 to study whether golfers might putt better if they imagined that the holes on courses were larger than they actually are.
‐ USDA “invested” $2 million to launch an internship program. And then it hired precisely one intern. This breathtaking sum included $192,500 to house that intern.
‐ Obama has expanded the Lifeline program, which now gives poor people free cell phones. While the program started under President Reagan, Obama has exploded Lifeline’s budget by 107 percent — from $772 million in 2008 to $1.6 billion today.
“Keep Obama in president [sic],” one Lifeline beneficiary enthused last month. “He gave us a phone. He gonna do more.”
‐ The Obama administration gave A123 Systems a stimulus grant to manufacture electric-car batteries. Obama predicted at a 2010 Rose Garden ceremony that A123 would hire “more than 3,000 by the end of 2012.” He added: “This is what’s possible in a clean-energy economy.”
A123 filed for Chapter 11 bankruptcy on Tuesday. It had already burned through $132 million of its $249 million allocation. It also had received money in 2003 and 2007 from the financially reckless Bush-Rove administration. Sadly, Obama turned his predecessor’s spending fever into fiscal pneumonia.
Including the ten Obama-funded green bankruptcies that I documented last July, A123 is now at least the 14th such failure. As GOP nominee Mitt Romney told Obama in their first debate: “I had a friend who said you don’t just pick the winners and losers. You pick the losers.”
(Update: Since submitting this op-ed piece Thursday evening, yet another Obama-subsidized green-energy company’s implosion has come to my attention. Satcon Technology filed for Chapter 11 bankruptcy protection one day after A123 did. The Boston-based solar company failed after 22 consecutive quarterly losses.)
So far, in reverse chronological order, these 15 green-energy companies have received at least $3.84 billion in taxpayer subsidies from Obama, and then filed for bankruptcy:
‐ Babcock & Brown ($178 million)
Some of these eco-fiascos are tragicomic. According to one Abound Solar employee, “Our solar modules worked, as long as you didn’t put them in the sun.” The Daily Caller also reported that Abound’s solar panels had a bad habit of bursting into flames.
Government waste has existed since at least President Reagan’s pork-busting Grace Commission. Indeed, Hammurabi’s palace probably was filled with tax-funded hangers-on. Still, Obama promised “change.” Instead, he has catapulted this multi-billion-dollar problem into a trillion-dollar calamity.
Meanwhile, free-marketeers make a huge mistake by identifying deficits and the surging national debt as problems that will befall America’s children and grandchildren. Beyond sounding lame, especially to this country’s millions of childless adults, such tired rhetoric about “the children” gives big spenders an excuse to keep on spending — at least until those blessed boys and girls grow up.
Such exhausted slogans also fail miserably to capture the urgency of slashing spending right now, since this fiscal irresponsibility already crowds out capital that should finance more productive activities. Why should bankers make risky business loans when Uncle Sam shows up every day, eager to borrow money that he almost certainly will repay, even if he needs to print more of it? Of course, anti-counterfeiting laws preclude this option for non-federal borrowers.
Another threat: Obama’s relentless outlays and incessant indebtedness quickly could slide from the Treasury’s balance sheet to IRS Form 1040.
“The president’s spending, the president’s borrowing will cause this nation to have to raise taxes on the American people, not just at the high end,” Governor Romney warned in Tuesday’s presidential debate. “A recent study has shown that people in the middle class will see $4,000 a year in higher taxes as a result of the spending and borrowing of this administration. I will not let that happen. I’ll get us on track to a balanced budget, and I’m going to reduce the tax burden on middle-income families. And what’s that going to do? It’s going to help those families, and it’s going to create incentives to start growing jobs again in this country.”
“We have $16 trillion worth of debt,” Coburn explained. “A 1 percent rise in interest costs us $160 billion per year. That has nothing to do with children and grandchildren. It has everything to do with you, because if in fact we do not get this thing under control, you’re going to see [a return to] our historical interest rates — which are about 5.8 percent on average. You go from under 2 percent interest, right now. If you add 3.8 times $160 billion, all of a sudden, you’re at $600 billion in additional interest costs — like that,” Coburn said, snapping his fingers. “And that will happen regardless of what Ben Bernanke does in terms of printing money. It will happen as soon as the level of confidence in this country’s ability to repay its debts goes down. . . . We’re the best-looking horse in the glue factory.”
That sag in the nag’s back cannot be denied. On August 5, 2011, Standard & Poor’s downgraded America’s sovereign debt from the top AAA rating, which it always had enjoyed. This was another Obama-inspired first for the USA. On Obama’s tenure, Egan-Jones, another SEC-certified rating agency, has slashed America’s creditworthiness — thrice.
Awash in red ink, President Obama seems to be sinking in the Red Sea.
— New York commentator Deroy Murdock is a Fox News contributor, a nationally syndicated columnist with the Scripps Howard News Service, and a media fellow with the Hoover Institution on War, Revolution, and Peace at Stanford University.