President Barack Obama urged legislators this week to "seize the moment," saying that they had "a chance to stabilize America's finances for a decade, for fifteen or twenty years." He is reportedly still pushing Republicans for a "big deal" that would include $4 trillion in deficit reduction over the next ten years. But why should we believe that he is serious about cutting spending now?
Since taking office, the president has grown federal discretionary spending, excluding defense, by 24 percent, adding $734 billion in spending over the next decade. This year alone, the Federal Government will spend $3.6 trillion or 24 percent of gross domestic product which is the highest burden on the economy since the end of World War II.
In his most recent State of the Union address, the president promised big things, including entitlement reform, because he recognized that his spending spree was unsustainable. His budget for 2012 included $100 billion in yearly spending cuts between now and 2021 however---a meager $1.1 trillion in deficit reduction over that period compared to a grand total of $46 trillion in spending. Even congressional Democrats voted against it.
After Republicans came out with their plans to privatize Medicare and cut spending by more than $6 trillion over the next ten years, only to barely balance the budget by 2021, the president championed a "balanced" approach in a speech. He promised more cuts but simultaneously pledged to defend Medicare and Social Security from reckless Republican budget cutting. He added that there should be tax hikes on the wealthy.
The fiscal impact of what the president talked about in April is difficult to measure. As the head of the nonpartisan Congressional Budget Office said, "We don't estimate speeches. We need much more specificity than was provided in that speech for us to do our analysis," he told congressmen. In other words---more talk but still no plan.
The president likes to talk about making "hard choices" but according to House Speaker John Boehner, his administration has yet to put concrete entitlement reforms on the table---reforms which Obama's own Democratic Party has rejected beforehand. Minority Leader Nancy Pelosi said last week that she would not "reduce the deficit or subsidize tax cuts for the rich on the backs of America's seniors and working families." Senate Majority Leader Harry Reid said in January that Social Security was "not in crisis. This is something that's perpetuated by people who don't like government," he told NBC. "Social Security is fine."
So let's see. The president has added trillions to the national debt. He and leading members of his party have rejected meaningful entitlement reforms which is the only way to rein in spending in the long term. He has never put out a serious budget or concrete plans for deficit reduction. Senate Democrats haven't enacted a proper budget for almost the entire duration of Obama's presidency. And when the debt ceiling issue came up, his White House spent weeks trying to convince lawmakers to schedule a "clean" debt vote which would lift the debt ceiling without any budget cuts.
Indeed, the president admitted as much when he said this week that he had "not seen a credible plan, having gone through the numbers, that would allow us to get to $2.4 trillion without really hurting ordinary folks." He said in his radio address this Saturday that "you can't solve our deficit without cutting spending" but "you also can't solve it without asking the wealthiest Americans to pay their fair share." That means more taxes!