If Obama Had Kept His Campaign Promises, We Wouldn't Have a Deficit Today
President Obama pledged Wednesday "to act boldly now" on the huge deficits. But alas his newly revealed budget for 2012 is no better at cutting the deficit than was his first attempt just two months ago.
Yes, we do indeed need to act boldly. With deficits accumulating to $4.3 trillion during over his first three years as president and another $10.4 trillion projected over the next decade, time is not on our side. As it is, the president not only pushed for the increased spending but also has fought budget cuts at each step along the way. And the initial efforts have been meager. The Congressional Budget Office estimates that the so-called "$38 billion" spending cut bill over which the government was almost shut down actually only cuts $352 million from this year's budget.
The president announced Wednesday that the new proposal "builds on the roughly $1 trillion in deficit reduction I already proposed in my 2012 budget," making it sound as if he has already made the tough decisions fighting for fiscal discipline. Unfortunately, it isn't so. The Congressional Budget Office, designated by the White House as the ultimate referee on spending questions, reported a few weeks ago that Obama’s February budget plans will actually increase the deficits over the coming decade by $1.2 trillion. That is a sharp contrast to the $1.1 trillion reduction touted by Mr. Obama. The CBO dismissed the president's figure, saying he underestimated how much more both existing and new programs will cost.
That $2.3 trillion difference blows a huge hole in the president's new budget plans. Just that change by itself means that instead of $4 trillion cut in deficits, even if everything else works out the way Obama says that it will, deficits will only be reduced by $1.7 trillion.
There are still more oddities to Mr. Obama's counting methods. The CBO numbers examine spending and revenue over 10 years, the length of time government accounting has consistently examined, while the president, with no explanation, included an additional two years for a total of 12 years. The president himself has never previously used this length of time, and he did it to exaggerate his deficit reductions, hoping that people won't notice that the cut per year will be smaller.
In addition, the CBO claims the errors in Obama's estimates increase over time. Conservatively, that means that Obama's numbers may be severely overestimating his deficit reduction during the 11th and 12th years by nearly a trillion dollars. If so, his claimed reduction in deficits by $4 trillion amounts to less than a $1 trillion, meaning that the nation's debt will still rise by well over $11 trillion over 12 years.
Even that measly cut may be largely smoke and mirrors. Obama's savings included the increased revenue to the treasury by eliminating the Bush tax cuts for "every millionaire and billionaire in the country." But this leaves out the obvious fact that the CBO numbers follow existing law and already assume that taxes will increase in 2013. Another $400 billion in Mr. Obama savings come from unidentified reductions in "wasteful" defense spending. Yet, unlike past presidential budgets, this one was not accompanied by supporting documents and spreadsheets, which are customarily put up for public scrutiny on the official White House website.
His Wednesday speech however gave us a better understanding of what the Mr. Obama will refuse to cut. Entitlements such as Medicare, Medicaid, and Obamacare are all off the table. Worse Obama falsely demonizes Republicans as cutting Medicare benefits when Rep. Ryan’s plan ensures that payments will keep up with inflation. Such false claims poison the debate and make serious budget cutting very difficult to accomplish.
Obama also defended many government-spending programs as "investments." Unfortunately, the subsidies so labeled -- such as his much loved alternative energy "investments" -- are money sinks that no private individual would put their own money into. If building high-speed trains make sense, private companies can build them. If medical research makes sense, people will make those investments without politics entering the picture.
President Obama is no more willing to cut spending now than when he first became president. He repeatedly promised “a net spending cut” during the 2008 presidential debates and on the campaign trail. And yet federal spending under his watch has soared from 20.9 percent of GDP in 2008 to 24.3 percent in 2011. If Obama kept his campaign promises, there would be little or no deficit today.
John R. Lott, Jr. is a FoxNews.com contributor. He is an economist and author of ”More Guns, Less Crime” (University of Chicago Press, 2010).