Wall Street Journal: $4.4 Trillion
23 August 2010
(Copyright (c) 2010, Dow Jones & Company, Inc.)
Speaking last Wednesday in Columbus, Ohio, President Obama asked, "How do we, over the long term, get control of our deficit?" Good question.
Here's the answer suggested by last Thursday's semi-annual budget summary from the Congressional Budget Office: Stop spending so much.
CBO's mid-year review largely reinforces the bad news we already knew -- to wit, that spending has exploded since Democrats took over Congress in 2007, first with the acquiescence of George W. Bush and then into hyperdrive after Mr. Obama entered the White House.
To appreciate the magnitude of this spending blowout, compare CBO's budget "baseline" estimate in January 2008 with the baseline it released Thursday. The baseline predicts future spending based on the law at the time. As the nearby chart shows, in a mere 31 months Congress has added more than $4.4 trillion to the 10-year spending baseline. The 2008 and 2009 numbers are actual spending, the others are estimates. As recently as 2005, total federal spending was only $2.47 trillion.
Keep that $4.4 trillion in mind the next time you hear Mr. Obama or Speaker Nancy Pelosi say they "inherited" this budget mess. Let's assume the recession that Mr. Obama inherited -- Mrs. Pelosi was already in power -- was responsible for causing $1 trillion or so in deficit spending. That still doesn't explain why the annual deficit of roughly $1.4 trillion will be nearly as high in fiscal 2010, after a year of economic growth, as it was in 2009. Or why CBO says the deficit will still be nearly $1.1 trillion in 2011 even if all of the Bush-era tax cuts are repealed.
The deficit is barely declining because of the lackluster economic recovery, which continues to yield too little revenue, and especially because of the record levels of spending passed by the Democratic Congress and eagerly signed by Mr. Obama.
To pick one illustration: The annual average increase in domestic, nondefense discretionary spending -- on the likes of education, food stamps, and things other than Medicaid, Medicare and Social Security -- was 6.4% from 1999-2008. Yet in 2009, nondefense discretionary spending rose by 11.2%, and in 2010 it will grow by another 14.7%. Much of this increase has been added directly to the CBO baseline, compounding future spending levels as far as the green-eyeshade can see.
After all of this, CBO nonetheless predicts that nondefense discretionary spending will grow by only 2.3% in 2011. If you believe that, you probably believe that someone other than Mrs. Pelosi will be Speaker of the House.