What is the Breakdown of President Barack Obamas 2011 Budget, and What are Conservative Solutions to Such Spending Sprees?
Last year, President Obama swept into office on a promise to confront tough choices–and then released a budget proposing the largest debt-and-spending spree in American history. With Washington having committed itself to more government than its taxpayers could realistically afford, basic fiscal responsibility demands that the President scale back his expensive proposals. Instead, this year’s budget is even more fiscally irresponsible.
Obama Budget Breakdown
Spending. The 2011 budget is $3.8 trillion dollars. Before the recession, the federal government spent about $24,000 per U.S. household. President Obama would hike it to $36,000 per household by 2020, in effect producing an inflation-adjusted $12,000-per-household expansion of government. In fact, of the few areas where spending was cut, two were with important defense and education programs.
Taxes. President Obama’s 2011 budget calls for $2 trillion in higher taxes over 10 years–after subtracting a relatively insignificant $154 billion in tax cuts. This would be a $17,000 tax increase for every American household during that span. Though no economic theory justifies raising taxes during a recession, President Obama would impose nearly $1 trillion in tax hikes for 3.2 million upper-income families and small businesses. He would eliminate tax breaks for charitable giving and the mortgage interest deduction for millions of Americans. In addition, the energy taxes known as a cap-and-trade system are expected to pull in about $800 billion primarily from American businesses and families over the next decade.
Deficits. Even the steep tax increases planned for all taxpayers would not finance all of this spending. After harshly criticizing President Bush for running $3.3 trillion in deficits over eight years, Obama’s budget would run $7.6 trillion in deficits over what would be his eight years in the Oval Office, with 2010 earning a $1.6 trillion deficit$143 billion higher than the recession-driven 2009 deficit. Moreover, President Obama would run up more debt over his eight years than all other Presidents in American history, from George Washington through George W. Bush, combined.
A Better Way
If President Obama is serious about reining in spending and closing budget deficits, he needs to propose real and specific spending cuts. To validate his professed claims of budget stewardship and fiscal discipline Obama should repeal the economic stimulus and TARP, bring Social Security and Medicare into long-term sustainability, and bring discretionary spending back to pre-recession levels. It would also mean putting the brakes on an unaffordable new health entitlement, and other new spending initiatives. If the President decides not to legitimately restrain spending, taxpayers should prepare for historic levels of debt and devastating tax increases.