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The Budget Fudge

In a portion of last night’s speech that rankled many conservatives, Obama pointed the finger at defense spending as the cause of our fiscal woes: “We have spent over a trillion dollars at war, often financed by borrowing from overseas. This, in turn, has short-changed investments in our own people, and contributed to record deficits. For too long, we have put off tough decisions on everything from our manufacturing base to our energy policy to education reform.” This is hooey.

The Washington Post explains:

Federal domestic spending increased a record 16 percent to $3.2 trillion in 2009, the Census Bureau reported Tuesday, largely because of a boost in aid to the unemployed and the huge economic stimulus package enacted to rescue the sinking economy.

The rise in spending was the largest since the Census Bureau began compiling the data in 1983. The Washington region was among the biggest beneficiaries of the government’s spending.

With congressional elections looming this fall, the spike in federal spending has emerged as one of the nation’s most contentious political issues.

Many Republicans accuse President Obama and his Democratic allies of being reckless spenders who are harming the nation’s long-term economic prospects by inflating the deficit.

It doesn’t appear that defense spending is the problem:

Overall, the largest chunk of federal spending – about 46 percent of the $3.2 trillion – went to Medicare, Medicaid and Social Security, entitlement programs that are projected to swell as the population ages.

Pay for federal employees accounted for nearly $300 billion of the spending and nearly half of that went to the Defense Department payroll.

In July, Gary Schmitt debunked the idea that defense spending is driving our deficits:

Right now, Defense’s share of federal outlays—including those for Iraq and Afghanistan—is 18 percent.  That’s the same level it was at during the Clinton years.  In contrast, mandatory spending eats up some 56 percent of federal spending, while discretionary non-defense spending is 19 percent.  Core entitlement spending (Social Security, Medicare, Medicaid) is now double that of defense. And while entitlement spending and debt service will continue to explode, the Pentagon’s share of federal spending will be shrinking to 15 percent within the next few years. While the Obama administration has already cut some $300 billion in defense programs, it has been spending nearly $800 billion to (supposedly) stimulate the economy.

This is yet another example of two Obama traits. First, he makes stuff up. Really, what he said last night is not remotely true no matter how you do the math. And second, he stretches the truth to sustain an ideological preference: he wants to spend more and more on domestic programs, so he’s anxious to trim as much from our defense budget as possible. And to do that, we can’t make open-ended commitments.



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