From the midweek edition of the Morning Jolt:
Obama: We Don’t Want a Balanced Budget Just for the Sake of Balance
When it comes to chasing a balanced budget, President Obama is not exactly Inspector Javert (or Samuel Gerard, depending on your pop-culture frame of reference). But he admitted Tuesday he was never really trying that hard:
In an exclusive interview with ABC News, President Obama rejected calls to balance the federal budget in the next ten years and instead argued that his primary economic concern was not balancing the budget, but rather growing the economy.
“My goal is not to chase a balanced budget just for the sake of balance. My goal is how do we grow the economy, put people back to work, and if we do that we are going to be bringing in more revenue,” he said.
“We noticed,” the guys at Weasel Zippers quip.
In the broadest sense, Obama is right: A country with the economic resources and general stability that the United States has enjoyed through much of its history can afford to run a deficit. Wiser minds than me argue that the real measuring stick is the debt-to-GDP ratio.
Our debt is . . . $16,703,943,129,416.14, as of Monday. That’s $16.7 trillion.
Our nominal GDP is $15.6 trillion. Oof.
Looking at the inflation-adjusted numbers for our annual deficit, year by year . . . you know what used to be considered “a lot”? $500 billion, in 2004. (That year, unadjusted for inflation, it came in at $413 billion.) Back in 1991, it came in at $453 billion. So a half a trillion was the pre-Obama all-time high.
Now look at the Obama era: $1.5 Trillion in 2009, $1.36 trillion in 2010, $1.32 trillion in 2011, $1.1 trillion in 2012. We’re supposed to be really happy that this year it might come in under a trillion, in the $900 billion range.
In other words, the best Obama has done is twice as bad as it’s ever been.
No, we don’t need a perfectly balanced budget — which is one of the reasons I’m pretty “meh” on the notion of a Balanced Budget Amendment to the Constitution. But we’ve got to get the annual deficit something closer to “only” a couple hundred billion each year.
Anyway, if you were hoping for a grand bargain, rest assured that congressional Democrats will be every bit as helpful on entitlement reform as we’ve come to expect:
Some liberals challenged Obama on his frequently repeated call to include entitlement savings in any grand bargain. Sen. Bernie Sanders, independent of Vermont, reiterated his opposition to adopting a less generous cost-of-living formula to calculate Social Security benefits.
“We were cautioning him about that: Be careful about this grand bargain,” said Democratic Sen. Tom Harkin of Iowa. But, he told reporters, Obama informed them “that’s something that’s still open for negotiation.”
Obama did not promise the caucus that he would oppose raising the eligibility age for Social Security and Medicare, an issue Harkin brought up during the meeting. “He didn’t make a commitment,” said Harkin, “but he seemed to indicate that yes, there are other ways of solving the entitlement problem without doing things like that.”
Notice this cute line in the Washington Post’s short write-up: “Obama plans to release his own budget plan in April, two months after the president is required to announce his budget priorities to Congress.”