Obama's Trillion Dollar Lies
August 29, 2012 - 6:09 AM
For example, on Aug. 14, he told a crowd in Waterloo, Iowa: "I'll make sure government still does its part to reduce our debt and our deficits. We've cut out already a trillion dollars' worth of spending we don't need."
On June 22, in Tampa, Fla., he said: "We're going to reduce our deficit by $4 trillion. I have a detailed plan. We'll cut spending we can't afford."
On June 12, in Philadelphia, he said: "And I've already signed $2 trillion of cuts into law already and have proposed $2 trillion in additional deficit reduction."
So, which is it?
Did Obama already cut spending by a trillion, or does he plan to cut the deficit by $4 trillion, or did he already sign legislation to cut it by $2 trillion and plans to cut it by $2 trillion more?
Is he making sure government "does its part to reduce our debt"?
The truth is: none of the above. Obama has not cut federal spending, and the fiscal 2013 budget plan he presented to Congress would dramatically increase deficit spending.
In fiscal 2008, when then-Sen. Obama was running for president, federal spending was $2.983 trillion, according to the White House Office of Management and Budget. In fiscal 2009, when Sen. Obama voted for the $700 billion bank bailout and President Obama signed what the Congressional Budget Office now says was an $833 billion economic stimulus law, federal spending increased to $3.518 trillion. In fiscal 2010, federal spending dropped modestly to $3.456 trillion — $62 billion below 2009 but $473 billion above 2008.
Then, in fiscal 2011, federal spending increased again to $3.603 trillion. This year, OMB estimates, it will increase yet again to $3.796 trillion.
If you generously take as your starting point fiscal 2010 — the first year Obama had full power to submit a budget and veto any spending bills he did not like — annual federal spending has increased $340 billion since then.
Fact: Obama did not "already" cut a trillion in federal spending.
Obama's claim that he "already signed $2 trillion of cuts" is a reference to the debt-limit deal he cut with House Speaker John Boehner last year. That deal's primary purpose was not to cut spending but to increase debt. At the time, the law prohibited the government from increasing the debt past $14.294 trillion. Obama and Boehner agreed to change the law so the government could borrow an additional $2.1 trillion and increase the debt to $16.394 trillion.
In exchange for agreeing with one another to borrow an additional $2.1 trillion in the name of American taxpayers, Obama and Boehner agreed to cap the amount of increase in future federal spending — when, possibly, both of them could be out of office.
Tellingly, the CBO began its explanation of what the Obama-Boehner deal might mean for future deficits with the word "if."
"If appropriations in the next 10 years are equal to the caps on discretionary spending and the maximum amount of funding is provided for the program integrity initiatives, CBO estimates that the legislation — apart from the provision related to the joint select committee — would reduce budget deficits by $917 billion between 2012 and 2021," said CBO.
"In addition, legislation originating with the joint select committee, or the automatic reductions in spending that would occur in the absence of such legislation, would reduce deficits by at least $1.2 trillion over the 10-year period," CBO continued. "Therefore, the deficit reduction stemming from this legislation would total at least $2.1 trillion over the 2012-2021 period."
Then CBO added this warning: "Those amounts are relative to CBO's March 2011 baseline adjusted for subsequent appropriation action."
Bottom line: The Obama-Boehner budget deal would not cut spending, it would cut the size of anticipated future deficits based on the deficits the government was already planning to run based on legislation already enacted.
And that, too, would change if new legislation were enacted.
Even so, the Obama-Boehner deal would not cut spending in the long-term over even the mid-term.
In March, the CBO published an updated "baseline" for it budget projection, incorporating the spending caps from the deal. It showed that spending would indeed dip from $3.627 trillion this year to $3.580 trillion next year — a drop of 47 billion. After that, it would increase in each of the next nine years, eventually hitting $5.520 trillion in 2022.
Under the Obama-Boehner deal, the budget would never be balanced and the debt would increase by another $2.887 trillion over the next decade.
But Obama was not satisfied with that. This year, he introduced a fiscal 2013 budget that would have reversed the debt deal's caps on increased spending.
"Over the 2013-2022 period," CBO concluded in its analysis of Obama's proposal, "the cumulative deficit that would result from enacting the president's budget — $6.4 trillion (or 3.2 percent of GDP) — would be $3.5 trillion larger than the cumulative deficit projected under current law."
When Obama told the people in Waterloo, Iowa, this month that he would make sure government did its part to reduce the debt, it was not a $1 trillion lie. It was a $3.5 trillion lie.