President Obama’s Illusory Budget
- 20 February 2011 by Author 0 Comments
President Obama’s Illusory Budget
By Richard Larsen
Published – Idaho State Journal, 02/20/11
In 1986, Speaker of the House Tip O’Neil declared President Ronald Reagan’s 1987 Budget “DOA,” or Dead on Arrival because it recommended “draconian cuts” of about 3% off of a $994 billion budget. In a facetious twist, the Office of Management and Budget delivered the budget to Capital Hill in an ambulance on the chest of a supine OMB public affairs assistant, who, when delivered to the House Budget committee room, sat up, Lazarus-like, to prove that the budget was still alive.
Now fast-forward to the 2012 edition of the presidential budget request, and we see numbers which the House Speaker should have delivered to the House, perhaps not in an ambulance with flat-lining EKG monitors, but rather in a hearse. And just for good measure, with a stake driven through the heart of it.
Words cannot accurately describe the staggeringly outrageous figures themselves or the disconnect with economic realities in that massive document. It’s further clear that the president didn’t get the message from the November election.
With proposed spending of $3.7 trillion, and projected revenue of $2.6 trillion, the projected deficit for 2012 is a whopping $1.1 trillion. Based on the president’s own budget figures, the FY 2015 figures are $4.2 trillion in spending, $3.6 trillion in revenue, and a deficit of $768 billion.
The spending figures are astronomically illogical and unsustainable, but even more alarming is the projected increase of 65% in revenue. Where is that mythical 65% increase in revenue coming from that allows Obama to brag that the deficit will be reduced over the next five years? For those of you who subscribe to the notion that we’re “taxed enough already,” brace yourselves, for there’s only one way that revenue can be increased by 65%. And it brings to mind the classic idiom of killing the goose that lays the golden egg.
As incomprehensible as the budget recommendation is, even more disturbing is the way the president represents it. In his press conference when he rolled it out (should’ve been on a morgue gurney), Obama shockingly declared, “On the budget, what my budget does is to put forward some tough choices, some significant spending cuts so that by the middle of this decade our annual spending will match our annual revenues. We will not be adding more to the national debt. It’s — so, to use a — sort of, an analogy that families are familiar with, we’re not going to be running up the credit card anymore. That’s important; and that’s hard to do. But it’s necessary to do, and I think that the American people understand that.”
Such a statement, in light of figures taken directly from his own budget, can only be characterized as an immense detachment from reality. Where are the “spending cuts” if total spending increases from $3.7 to $4.2 trillion? There is no cut in spending, perhaps only a cut in the rate of growth of that spending. And thank heavens for that, since the total government debt has increased by nearly 100% in just four years, having just surpassed the $14 trillion mark.
And yet still he has the audacity to declare, “we’re not going to be running up the credit card anymore,” Remember, this is his own budget. Either he didn’t know what was in it and was just saying what he thought we wanted to hear, or he knew full well what was in it, and still told us what he thought we wanted to hear. I’m convinced the latter is the case, and he just thinks we’re oblivious to the facts or that we’re too illiterate to know that he’s obfuscating the truth. That makes his statement no less than a prevarication, of the bald-faced variety.
It is with regret that I’ve come to the conclusion that there is little connection between reality and what this president says. We saw it through the health care debate, consistently making assertions that we know now were just not so. He gives new meaning to the old quip, “How do you know when a lawyer is lying?” Answer, “When his lips are moving.”
The President’s budget is supposed to be a blueprint of what the executive branch foresees from a spending and revenue standpoint. It is not enacted, unless adopted by Congress. The House of Representatives creates the budget that the government lives by, and we can only pray that our Congressmen are smarter than the president thinks we are.
We make a mistake if we assume that what he says is true and reliable. Don’t accept the sound bites at face value. A new level of scrutiny is required of all of us as citizens to sort out the facts from the propaganda that the president and the still-doting press spin for public consumption.
AP award winning columnist Richard Larsen is President of Larsen Financial, a brokerage and financial planning firm in Pocatello, and is a graduate of Idaho State University with a BA in Political Science and History and former member of the Idaho State Journal Editorial Board. He can be reached at firstname.lastname@example.org.