Commentary Magazine


Topic: deficit

The Budget Deficit

The good news is that the budget deficit of the federal government for fiscal 2013 fell by $309 billion, about 30 percent, to its lowest level in five years. It’s the first Obama deficit to be under a trillion dollars. But the bad news is that the deficit, $680.3 billion, is still 4.1 percent of GDP, well above what is considered a safe borrowing level by national governments for long-term fiscal health.

$680.3 billion is a lot of money. It is more than $2,100 for every man, woman, and child in the United States. It is greater than the total GDP of all but 20 countries. Taking inflation into account, it is about equal to the biggest budget deficit experienced in World War II (1943, when we were in the red to the tune of $54.7 billion). It is larger than the entire national debt as recently as 1976.

Read More

The good news is that the budget deficit of the federal government for fiscal 2013 fell by $309 billion, about 30 percent, to its lowest level in five years. It’s the first Obama deficit to be under a trillion dollars. But the bad news is that the deficit, $680.3 billion, is still 4.1 percent of GDP, well above what is considered a safe borrowing level by national governments for long-term fiscal health.

$680.3 billion is a lot of money. It is more than $2,100 for every man, woman, and child in the United States. It is greater than the total GDP of all but 20 countries. Taking inflation into account, it is about equal to the biggest budget deficit experienced in World War II (1943, when we were in the red to the tune of $54.7 billion). It is larger than the entire national debt as recently as 1976.

Absent serious entitlement reform, the deficits are bound to increase in future years as more and more baby boomers retire and begin to receive Medicare and Social Security. The Congressional Budget Office estimates that entitlements will drive the deficits above 6.5 percent of GDP within 25 years, regardless of how well the American economy is performing.

The heart of the problem is that the national debt is a long-term problem and politicians are incentivized to think short-term. It is tomorrow’s headline and next year’s election that politicians care about. A crisis that is ten or twenty years down the road, even though it is clearly discernible now, is going to be someone else’s problem.

But every year that serious fiscal reform is put off, means the crisis, when it hits, will be that much more severe. The people who constitute the federal government today, Republicans and Democrats alike, are committing slow-motion treason by doing nothing now.

Read Less

Obama Goes Back to the Blame Game

White House staffers who have been grumbling about President Obama’s outreach efforts with Republicans in the past two weeks probably cheered up a bit when they saw their boss’s interview with ABC’s George Stephanopoulos yesterday. While the president was still talking about the virtues of schmoozing with the GOP, the more he talked about the substance of the budget negotiations the less likely it seemed that there would ever be much to talk about.

Liberals were denouncing the budget proposal put forward by Rep. Paul Ryan yesterday as a sign that Republicans were unwilling to bow to the president’s dictates and abandon their principles. But in his interview, the president was characterizing the issues that would have to be resolved in a way that makes it appear he isn’t backing down either. More than that, his lack of urgency about dealing with the debt crisis and his unwillingness to contemplate any meaningful reform of entitlements as well as the way he spoke of GOP efforts in that direction gave the lie to the current media narrative about his desire for compromise. If the president can’t even conduct a charm offensive without demonizing the other side in this dispute, then the whispers from the White House staff that the entire exercise is a cynical sham appear to be entirely correct.

Read More

White House staffers who have been grumbling about President Obama’s outreach efforts with Republicans in the past two weeks probably cheered up a bit when they saw their boss’s interview with ABC’s George Stephanopoulos yesterday. While the president was still talking about the virtues of schmoozing with the GOP, the more he talked about the substance of the budget negotiations the less likely it seemed that there would ever be much to talk about.

Liberals were denouncing the budget proposal put forward by Rep. Paul Ryan yesterday as a sign that Republicans were unwilling to bow to the president’s dictates and abandon their principles. But in his interview, the president was characterizing the issues that would have to be resolved in a way that makes it appear he isn’t backing down either. More than that, his lack of urgency about dealing with the debt crisis and his unwillingness to contemplate any meaningful reform of entitlements as well as the way he spoke of GOP efforts in that direction gave the lie to the current media narrative about his desire for compromise. If the president can’t even conduct a charm offensive without demonizing the other side in this dispute, then the whispers from the White House staff that the entire exercise is a cynical sham appear to be entirely correct.

To give President Obama his due, his continued willingness to talk to Republicans is a positive development, albeit four years too late. So, too, is his emphasis on the importance of economic growth. Prosperity would go a long way toward solving the budget problem, but any scheme put forward based on that assumption is a prayer not a plan. Nevertheless, every moment that he spends talking about building the economy rather than building the government must be counted as a plus for the cause of fiscal sanity.

However, the more the president talks about his ideas about a compromise with what he patronizingly referred to as the “common sense caucus” among Republicans, the more it sounds as if his definition of the word is very different from that of Webster. His statements made it clear that he is not particularly interested in dealing with the deficit. Even worse than that, his approach to one of the key planks of a prospective deal—entitlement reform—amounts to nothing more than lip service.

The president dismissed Ryan’s plan for balancing the budget in 10 years not just because it was predicated on repealing ObamaCare but because he doesn’t think there’s any real need to reach even that long-term goal. As he told Stephanopoulos:

We don’t have an immediate crisis in terms of debt. In fact, for the next ten years, it’s gonna be in a sustainable place.

But the problem goes deeper than the president’s apparent complacence. Although he said “entitlement reform” would be part of a deal, he slipped back into his usual campaign rhetoric when discussing how that would be accomplished:

No. We’re not gonna balance the budget in ten years because if you look at what Paul Ryan does to balance the budget, it means that you have to voucherize Medicare; you have to slash deeply– into programs like Medicaid; you’ve essentially got to– either tax– middle-class families a lot higher than you currently are; or you can’t lower rates the way he’s promised.

In other words, the president’s concept of reform is indistinguishable from his re-election vows to preserve the status quo that earned him the loyalty of his party’s base.

Moreover, discussion of balancing the budget elicits more of the president’s scorn as well as a standard piece of Obama demagoguery:

And, so– you know, 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’re gonna be bringin’ in more revenue. If we’ve controlled spending and we’ve got a smart entitlement package, then potentially what you have is balance. But it’s not balance on the backs of, you know, the poor, the elderly, students who need student loans, families who’ve got disabled kids.

Lost from his analysis is any acknowledgement that what he is doing is paying for all the benefits he wishes to distribute by piling up debt that will be put upon the backs of the kids and students who will be the taxpayers paying down the deficit he has grown a decade from now and beyond that. The generational theft that he is supervising will hurt the middle class that he is constantly telling us he cares about far more than the wealthy whose taxes he wishes to raise.

Indeed, far from working toward establishing common ground with Republicans, the president seemed to be much more interested in preparing to lay the blame for any failure to make a deal on the GOP:

But ultimately, it may be that– the differences are just– too wide. It may be that ideologically, if their position is, “We can’t do any revenue,” or, “We can only do revenue if we gut Medicare or gut Social Security or gut Medicaid,” if that’s the position, then we’re probably not gonna be able to get a deal.

Ryan and other Republicans may have their differences with the president but, as he well knows, their goal is to reform entitlements in order to preserve them. Without taking steps to make these programs fiscally viable by increasing the age of eligibility and means testing, they will eventually drown the federal government in a sea of debt that it cannot tax its way out of. Rhetoric about gutting Social Security and Medicare is not reaching out. It is just the same old Obama class warfare that helped create the current deadlock.

The president’s falling poll numbers and the shrinking gap between those who blame Republicans and those who blame the White House for the impasse created the need for an Obama charm offensive. The crying of wolf about the sequester from the White House flopped not just because it wasn’t credible but because the public—even many of those who voted for the president—understood that the only way to deal with the debt and to fix the nation’s problems is to start shrinking government rather than expanding it. Though he may be preparing the ground for blaming the GOP for the failure to find a compromise (and, he hopes, win the 2014 midterm elections), he may find that this tired act is wearing out its welcome.

Read Less

Not a Single Dime? Not a Chance.

The most dramatic part of President Obama’s State of the Union speech was his impassioned appeal for more gun control. Shamelessly invoking gun victims, including the children of Newtown, Connecticut, the president demanded that each of his proposals for new restrictions should be given an up or down vote in Congress even though none would do much to end gun violence. That earned him a standing ovation from Democrats even if many moderate members of his party from red states have no intention of ever putting themselves in a position where they might have to vote on such measures.

But while the “deserve a vote” rhetoric about gun control got the most applause the centerpiece of his address was a laundry list of government programs that he wants implemented that amounts to a second stimulus in all but name. For the most part this was just another straight-forward demand for a liberal vision in which government could and must afford to do just about everything from pre-K education to green jobs to easing the way for more home ownership. But by claiming that this staggering wish list wouldn’t “add a single dime to the deficit” he may have created a one-man credibility gap that even his impressive speaking ability and personal charm can’t close. You have to believe in the Tooth Fairy to buy the idea that this much new bureaucracy and involvement in the private sector won’t wind up costing a lot more money that we don’t have.

Read More

The most dramatic part of President Obama’s State of the Union speech was his impassioned appeal for more gun control. Shamelessly invoking gun victims, including the children of Newtown, Connecticut, the president demanded that each of his proposals for new restrictions should be given an up or down vote in Congress even though none would do much to end gun violence. That earned him a standing ovation from Democrats even if many moderate members of his party from red states have no intention of ever putting themselves in a position where they might have to vote on such measures.

But while the “deserve a vote” rhetoric about gun control got the most applause the centerpiece of his address was a laundry list of government programs that he wants implemented that amounts to a second stimulus in all but name. For the most part this was just another straight-forward demand for a liberal vision in which government could and must afford to do just about everything from pre-K education to green jobs to easing the way for more home ownership. But by claiming that this staggering wish list wouldn’t “add a single dime to the deficit” he may have created a one-man credibility gap that even his impressive speaking ability and personal charm can’t close. You have to believe in the Tooth Fairy to buy the idea that this much new bureaucracy and involvement in the private sector won’t wind up costing a lot more money that we don’t have.

Obama’s roster of programs he wants implemented is long. Some of it involves ideas many Republicans will support like immigration reform. But much of it resolves around liberal ideological talking points like climate change which he hopes to solve by spending more on the kind of green jobs that gave the country scandals like the Solyndra boondoggle. He also threatened to take unilateral executive action on global warming if Congress didn’t act which means the Environmental Protection Agency will be given new unaccountable powers to crush economic growth around the country as well as driving up the cost of gas and just about everything else.

Other liberal patent nostrums like a minimum wage increase — a proposal that will kill jobs and hurt the very people the president claims to want to help — were also plugged. But perhaps the most curious item was his demand that the government ease the way for more home ownership. Given that the 2008 fiscal crisis was caused in large measure by government intervention in the market that made it easier for people who couldn’t afford to buy a home to get mortgages, going down that road again shows just how clueless this administration remains.

As for the immediate problem of avoiding the sequestration spending cuts, the president was disingenuous as well as unrealistic. The devastating sequestration cuts was the White House’s idea for resolving the 2011 debt ceiling standoff but the president is now pretending that it is all the fault of the Republicans. But as with everything else, ideology rules when it comes to a deficit plan that merely recycled his old rhetoric. The president considers his proposal balanced but that is a misnomer since he still refuses to contemplate genuine reform of entitlements and continues to pretend that taxing the rich will solve the deficit.

The president gave relatively short shrift to foreign policy even though it is entirely possible that the confrontation with Iran and the aftermath of the pullout from Afghanistan will provide the biggest crises of his second term. It is doubtful that those listening in Tehran were impressed by his calls for more diplomacy to forestall their nuclear threat. On the other hand, the Taliban and Al Qaeda, which he claims to have defeated, were probably cheered by his talk of accelerated pullouts from Afghanistan. The Benghazi debacle that gives the lie to the administration’s claim of victory over Islamist terror never got a mention.

But the bottom line of this speech is a claim that America can have a new raft of big government proposals without further sinking the nation into debt. It may be that whopper which will remembered long after his liberal shopping list is filed in the dustbin of history.

Read Less

Fact Checkers Not Swooning Over Clinton

Former President Bill Clinton showed us last night that he is still a master of the art of political rhetoric. Democrats loved his convention speech on behalf of President Obama and so did most of the media which had begun swooning over his magic touch hours before he even began talking. The genius of Clinton’s political style is that, unlike most of the Democrats on the Charlotte podium this week, he understands that there is more to political oratory than merely bludgeoning your opponents and damning them as women-hating plutocrats. Thus, Clinton not only sought to charm the audience with his aging but still potent down-home routine, he was also seeking to disarm listeners by throwing out some lines designed to make us think his goal is fairness. That led to perhaps the most awkward moment of the evening when he actually briefly praised President George W. Bush, leaving his partisan audience momentarily stunned.

But what the Democrats and the media really liked was Clinton’s lengthy refutation of Republican arguments as he spouted figures and claimed he was merely doing “arithmetic” in pointing out the GOP’s flaws. Clinton produced the laughs and the scorn he was trying for, earning applause in the arena and in the glowing notices that followed. But the notion that he demolished Mitt Romney and Paul Ryan has more to do with a willingness on the part of his listeners to buy whatever he’s selling than logic. As the Washington Post Fact Checker and the American Enterprise Institute’s James Pethokoukis report this morning, there were a number of points on which there is a wide gap between what Clinton said and the truth.

Read More

Former President Bill Clinton showed us last night that he is still a master of the art of political rhetoric. Democrats loved his convention speech on behalf of President Obama and so did most of the media which had begun swooning over his magic touch hours before he even began talking. The genius of Clinton’s political style is that, unlike most of the Democrats on the Charlotte podium this week, he understands that there is more to political oratory than merely bludgeoning your opponents and damning them as women-hating plutocrats. Thus, Clinton not only sought to charm the audience with his aging but still potent down-home routine, he was also seeking to disarm listeners by throwing out some lines designed to make us think his goal is fairness. That led to perhaps the most awkward moment of the evening when he actually briefly praised President George W. Bush, leaving his partisan audience momentarily stunned.

But what the Democrats and the media really liked was Clinton’s lengthy refutation of Republican arguments as he spouted figures and claimed he was merely doing “arithmetic” in pointing out the GOP’s flaws. Clinton produced the laughs and the scorn he was trying for, earning applause in the arena and in the glowing notices that followed. But the notion that he demolished Mitt Romney and Paul Ryan has more to do with a willingness on the part of his listeners to buy whatever he’s selling than logic. As the Washington Post Fact Checker and the American Enterprise Institute’s James Pethokoukis report this morning, there were a number of points on which there is a wide gap between what Clinton said and the truth.

As Pethokoukis points out, the catchiest statistic of Clinton’s 50-minute talkathon was his attempt to highlight a “jobs score” between Republican and Democratic administrations in which the GOP finds itself at the short end of a 42-24 million-job deficit. But the problem here is that some of the Democrats had conservative fiscal policies and some of the Republicans tilted left. Thus, John Kennedy’s tax cut for everyone, including the wealthy, produced a jobs gain while George H.W. Bush’s tax increase produced the recession that helped elect Clinton. The Nixon and Ford administrations were big spenders and taxers and, ironically, produced fewer new jobs than Clinton who cut taxes, reformed welfare and shrank government.

The real jobs score is that conservative economic policies created 40 million jobs while liberals, including Barack Obama created only 26 million.

The Post’s Fact Checker column also took Clinton to task for deceiving his audience by claiming President Obama’s proposed budget reduced the deficit by $4 trillion, something it says “is simply not accurate.” The number is compiled by the usual Washington budget gimmickry counting savings that aren’t really budget cuts. As the Post says, “it’s fake money being used to pay for real spending projects.”

The paper also chided Clinton for his description of the president’s bogus jobs plan that was to be paid for with “imaginary money.”

This sums it up:

Get the picture? Clinton praises Obama both for his sound budget math and for his jobs plan, even though the money to fund the budget and the jobs plan is used twice. That certainly doesn’t pass the Arkansas 2+2=4 test.

Clinton also strained credulity when he claimed that ObamaCare is already reducing the cost of health care before it has even been implemented. But as the Post says, any reductions have been due to the lousy economy over which Obama has presided. The former president also distorted the numbers of those newly insured under the law who will get private coverage as opposed to Medicaid.

And though the Fact Checker chooses not to analyze his comments about welfare reform, the column also alluded to Clinton’s claims saying “there may be less to this than meets the eye.”

But don’t expect most of the media to pick up on these glaring mistakes or to label them as “lies” the way they followed Democratic talking points after Paul Ryan’s speech last week. The true magic of Bill Clinton is not his ability to persuade wavering centrists to back Obama. Few votes were changed by his speech. The magic lies in Clinton’s ability to say anything and by dint of his seductive charms get most of the media and his party loyalists to treat it as the truth even if it isn’t.

Read Less

Conrad’s Final Markup and Fiscal Legacy

Senate Budget Committee Chairman Kent Conrad is often described as a fiscal hawk, but as he prepares to retire after 26 years in the Senate, his legacy may be as the chairman who failed to pass a budget for three years as national debt shot up by $4 trillion.

It’s not that Conrad didn’t try this week. Despite opposition from Democratic leadership, he scheduled a markup on a budget proposal for this afternoon – his last one before retirement – but yesterday suddenly backed down from the plan. There would still be a “markup,” he said – but it would be a markup in name only. No voting, no room to propose amendment, no chance of bringing anything to the Senate floor.

Read More

Senate Budget Committee Chairman Kent Conrad is often described as a fiscal hawk, but as he prepares to retire after 26 years in the Senate, his legacy may be as the chairman who failed to pass a budget for three years as national debt shot up by $4 trillion.

It’s not that Conrad didn’t try this week. Despite opposition from Democratic leadership, he scheduled a markup on a budget proposal for this afternoon – his last one before retirement – but yesterday suddenly backed down from the plan. There would still be a “markup,” he said – but it would be a markup in name only. No voting, no room to propose amendment, no chance of bringing anything to the Senate floor.

At the phantom markup today, Senate Republicans took out their frustration on Democratic leadership, which appears to have pressured Conrad into canceling the markup out of fear that a budget would make it to a floor vote before the election.

“I want to say how much I appreciate your efforts to bring a budget to the Senate floor and how much I sympathize with your dilemma,” Sen. John Cornyn told Conrad. “At the end of a long and distinguished Senate career you deserve more, and so do the American people.”

Sen. Grassley also sympathized with Conrad. “I understand the predicament that our beloved chairman is in…and the way he’s been treated by the leadership,” he said. “As much as he knows what should be done, party leadership doesn’t want him to do it.”

And Sen. Graham conceded the same. “Clearly your heart is in the right place,” he told the chairman. “But institutionally we’re broken.”

But as much credit as Conrad gets, his budget proposal is far from fiscally responsible. It includes $600 billion more in tax hikes than President Obama’s budget and increases debt by more than $8 trillion, according to Senate Republican estimates.

This isn’t a budget plan many moderate Democrats would agree to support, and Republicans would certainly attack it at length. And that’s fine. There’s no getting around the fact that negotiations can’t begin until a budget is offered up and debated. Conrad had a chance to make that his legacy. Instead, thanks to Democratic leadership, he’ll be remembered as the so-called fiscal hawk chairman who allowed the deficit to careen out of control for political points.

Read Less




Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor to our site, you are allowed 8 free articles this month.
This is your first of 8 free articles.

If you are already a digital subscriber, log in here »

Print subscriber? For free access to the website and iPad, register here »

To subscribe, click here to see our subscription offers »

Please note this is an advertisement skip this ad
Clearly, you have a passion for ideas.
Subscribe today for unlimited digital access to the publication that shapes the minds of the people who shape our world.
Get for just
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor, you are allowed 8 free articles.
This is your first article.
You have read of 8 free articles this month.
YOU HAVE READ 8 OF 8
FREE ARTICLES THIS MONTH.
for full access to
CommentaryMagazine.com
INCLUDES FULL ACCESS TO:
Digital subscriber?
Print subscriber? Get free access »
Call to subscribe: 1-800-829-6270
You can also subscribe
on your computer at
CommentaryMagazine.com.
LOG IN WITH YOUR
COMMENTARY MAGAZINE ID
Don't have a CommentaryMagazine.com log in?
CREATE A COMMENTARY
LOG IN ID
Enter you email address and password below. A confirmation email will be sent to the email address that you provide.