President Barack Obama has called critics who point out that his budget falls short of restoring fiscal balance “impatient.” After running multitrillion dollar deficits for two years though and bracing for a third, how much more patience does he want?
The president introduced a $3.7 trillion budget on Monday that included $100 billion in yearly spending cuts. While his budget would achieve $1.1 trillion in deficit reduction over the next ten years, in 2012, the Federal Government is expected to borrow a record $1.6 trillion.
The administration’s cuts would affect mainly welfare provisions, including financial assistance for the working poor, heating benefits and subsidies for community organizing activities in poor neighborhoods. The president also proposed a 5 percent cut in defense spending, eliminating tax exemptions for oil and natural gas producers while increasing subsidies for high speed rail and electric car development.
The spending reductions fall short of balancing the books. The White House boasts that by 2017, revenues will match outlays—except interest payments which account for several hundreds of billions of dollars annually. The budget assumes that the economy will have fully recovered by then. Republicans are afraid that as a result of increased public spending and taxation, job creation will actually be stifled.
During a press conference Tuesday, the president suggested that he might introduce bigger spending reforms in the near future. “If something doesn’t happen today, then the assumption is it isn’t going to happen,” he said. “My goal here is to actually solve the problem. It’s not to get a good headline on the first day.”
As David Brooks points out in his New York Times column, President Obama has rallied against deficit spending for years. As a senator, he forecast a “mountain of debt” if the Bush Administration continued its spending policies. While campaigning, he promised to tackle the budget issue and mere weeks after he was elected, Obama told The Washington Post that the country was “not in a position to kick it any further.” He promised to initiate a budget initiative in February 2009.
The president did install a deficit reduction commission near the end of 2009 but virtually none of the recommendations which its chairmen have made were adopted in his budget.
After the stimulus package passed, he and his aides said it would soon be time to turn to deficit issues. The same promise was made after health care reform. He made the pledge yet again at a press conference this week. Right now is not the time, the president always says, but tomorrow we will get serious.
“But tomorrow never comes,” writes Brooks.