Thursday, February 17, 2011

Obama vs the GOP on the Deficit

After President Obama introduced his budget to Congress last week (as he is required to do by law), he has been in a public debate with Republican leaders on federal spending. Obama's budget would freeze discretionary non-defense spending, makes cuts in some areas, raises spending in other areas. GOP leaders in Congress counter that Obama is not taking the deficit seriously enough because he wants to freeze spending at high levels (non-defense discretionary spending has increased over the last two years). Republicans are countering with their own budget cuts that would reduce overall non-defense, non-homeland security discretionary spending. Some Republicans, mostly representing the Tea Party, want to make cuts in the current year's budget as well.

This pitched battle over non-defense discretionary is, however, a smoke screen. Both sides want the public to believe that they are taking our national debt seriously, but they are avoiding the root causes of our current debt crisis. Here is the key point that Americans need to recognize: any plan to reduce our deficit that does not address Social Security, health care, and military spending is not a serious plan.

Take a look at this chart of federal spending for FY 2010 provided by the Concord Coalition. Social Security, health care, and defense comprise 65% of spending, while non-defense discretionary spending (education, environment, international affairs, and other) are only 11% of the budget.

Critics from both the right and left of the political spectrum have pointed out these failures by Obama and congressional Republicans. Here are a few samples:

"The more charitable interpretation of the president's decision not to tackle entitlement spending or the tax code is that the administration decided that leadership, in this case, was not good strategy." --Ruth Marcus, Washington Post  

"In this budget, in his [Obama's] refusal to do anything concrete to tackle the looming entitlement debt, in his failure to address the generational injustice, in his blithe indifference to the increasing danger of default, he has betrayed those of us who took him to be a serious president prepared to put the good of the country before his short term political interests. Like his State of the Union, this budget is good short term politics but such a massive pile of fiscal bullshit it makes it perfectly clear that Obama is kicking this vital issue down the road." --Andrew Sullivan, The Atlantic

"The classic test of whether politicians are serious about balancing the federal budget is whether they confine their suggestions to eliminating earmarks, foreign aid, and fraud, waste, and abuse. Politicians love to rail against these things because they're unpopular and therefore make attractive targets. But doing so is a dodge. All combined, they account for only a tiny fraction of federal spending, so doing away with them does little for the bottom line. Anyone who implies otherwise isn't being forthright about the problem or the possible solutions. But politicians have always gotten away with this because most voters don't know enough about the budget to realize they're being snowed." --Joshua Green, The Atlantic

"And now what this has become, I read, is a political strategy. The president is not talking about because he is waiting for the Republicans to talk about it. And our new, bold republicans we just sent to the House of Representatives aren't talking about it because they are waiting for him to talk about it. Let me suggest to you that my children's future and your children's future is more important than some political strategy. Let me suggest to you that what game is being played out here is irresponsible and it's dangerous. We need to say these things and we need to say them out loud- when we say we're cutting spending, when we say everything is on the table, when we say we mean entitlement programs we should be specific. 
And let me tell you what the truth is. What's the truth that no one is talking about-here is the truth that no one is talking about: you're going to have to raise the retirement age for social security. Oh I just said it and I'm still standing here! I did not vaporize into the carpeting and I said it! We have to reform Medicare because it costs too much and it is going to bankrupt us. Once again lightning did not come through the windows and strike me dead. And we have to fix Medicaid because it's not only bankrupting the federal government, it's bankrupting every state government. There you go. If we're not honest about these things, on the state level about pensions and benefits and on the federal level about social security, Medicare, and Medicaid, we are on the path to ruin." --Governor Chris Christie, speech at the American Enterprise Institute

"No one can reasonably claim that the budget crisis exists because America spends too much on bed nets and AIDS drugs. Our massive debt is mainly caused by a combination of entitlement commitments, an aging population and health cost inflation. Claiming courage or credit for irrelevant cuts in foreign assistance is a net subtraction from public seriousness on the deficit." --Michael Gerson, Washington Post

"Over the next few weeks, Republicans will try to cut discretionary spending to 2008 levels and tell their constituents they are boldly reducing the size of government. That is a mirage. Anybody who doesn’t take on entitlement spending is an enabler of big government. The supposedly rabid Republican freshmen are actually big government conservatives. They will cut programs that do measurable good while doing little to solve our long-range fiscal crisis." --David Brooks, The New York Times
Related Posts:

Public Opinion on Deficit Reduction

Thoughts on the Bowles-Simpson Debt Commission Report

The Difference Between the Deficit and the Debt

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