Budget falls way short on fixing debt

Perhaps it was too much to hope that President Obama would choose an election year to offer the first serious budget of his presidency, but the level of irresponsibility on display in his 2013 budget request still manages to shock.

The profound distance between our actual fiscal needs and the president’s policies is encapsulated by one striking fact: This budget calls for a net spending increase. As we enter the fourth straight year of trillion-dollar-plus deficits, spending restraint represents the bare minimum necessary to qualify any budget proposal as worthy of consideration. Yet Obama has turned in a budget request that would spend $47 trillion over 10 years and increase the debt by 68.9 percent. The amount of new debt alone in this plan is virtually equal to the entire national debt when the president took office.

Former White House budget director and current White House Chief of Staff Jack Lew said “there is pretty broad agreement that the time for austerity is not today.” If we should not rein in spending now — while the debt is $15 trillion — perhaps we should wait until the debt reaches $25.9 trillion in 2022? By that point, we’ll be spending almost $1 trillion per year just to pay the interest.

Although the Obama administration can never seem to find the right time for sensible spending cuts, tax increases are always in season. This budget calls for $1.9 trillion in new taxes that would hit families and small businesses alike. Under White House logic, cutting government spending will imperil job creation, while burying job creators in an avalanche of tax hikes and healthcare costs will not. The president has had ample opportunity to test this theory, and it has failed. Despite assurances that unemployment would be down to 6 percent by now, the jobless rate still hovers above 8 percent, almost three years after passage of the $1 trillion stimulus.

The budget proposal highlights another promise that has failed to materialize: Obama’s pledge to cut the deficit in half by the end of his first term. Under his proposal, federal spending increases by $820 billion, or 27.5 percent, compared to FY 2008. At 24.3 percent of GDP, spending for 2012 sets a new peacetime record. Even if the president gets his wish to increase the tax burden from 15.4 percent of GDP in 2011 to 20.1 percent of GDP in 2022, the budget never achieves balance. 

The president must rely on transparent budget gimmicks to claim even meager progress on deficit reduction. His budget boasts $2 trillion in savings that has already been enacted and another $1 trillion for spending in Iraq and Afghanistan that was never requested or allocated. Obama likes to insist that he inherited a $1.4 trillion deficit upon taking office in 2009, but FY09 spending includes his own initiatives, such as the State Children’s Health Insurance Program (S-CHIP), increases in U.S. forces in Afghanistan and, most importantly, the stimulus. The effort to claim otherwise and take credit for Republican spending cuts is nothing but smoke and mirrors to mask the fact that the Obama administration has fought deficit reduction every step of the way.

On the crucial issue of entitlement spending, Obama doesn’t even pretend to boast progress, or even feign much concern. Just last week, the annual Congressional Budget Office report revealed that mandatory spending will reach 14.3 percent of GDP by decade’s end, pushing deficits to “unsupportable levels.” Yet the president offers no serious solutions for this biggest driver of the debt. House Budget Committee Chairman Paul Ryan (R-Wis.) has shown more leadership and courage on this issue than the president of the United States. 

It is far from certain that the proposal would succeed even as the campaign document it so obviously is. The American people know we face a debt crisis that gets closer every day. Everyone understands that our children and grandchildren might not enjoy the prosperity, opportunities and health and retirement security that we take for granted. Obama makes a mockery of their concerns by offering a budget plan that would not deserve to be taken seriously even in 2008, when our debt was $459 billion. 

If the president won’t lead, he should at least give the American people an honest assessment of our challenges. This budget is nothing but a fairy tale.

Cole serves on the House Appropriations and Budget committees.