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Is That All There Is? Editorial Writers Strike Obama Budget with Sharp Quills

Mike Klein

President Barack Obama insists the White House budget wish list released Monday made hard choices. Tuesday morning editorial pages saw it differently.  Writers gave the Obama budget attempt a lukewarm reception, and that’s being fairly kind.   Mostly they asked, “Is that all there is?”  Here are excerpts from twelve of the nation’s most respected news organizations.

Chicago Tribune Editorial: “The debate over fiscal responsibility in the months ahead will deal only with a slim portion of federal spending. Nobody in power — not Obama, not the Democrats who run the Senate, not the Republicans who run the House — wants to talk much about what it’s going to take to curb the huge projected growth in entitlement spending. Even Obama’s projections say deficits will fall only to $607 billion a year by 2015, but will start rising rapidly again.”  Link

Dallas Morning News Editorial: “Even under the administration’s optimistic future scenarios, the bottom lines are staggering.  A record $1.56 trillion deficit for 2011, with trillion-dollar estimates (give or take a few hundred billion) deep into the decade. An unemployment rate still about 8 percent at the end of 2012.  A tripling or more of the national debt, even without considering the shocking multiplier of unfunded Medicare and Social Security obligations … This starts the conversation. We, too, admit some skepticism that a sharply divided Congress will improve on Obama’s proposals, but the nation had better hope someone finds religion before it’s too late, if it isn’t already.”  Link

Denver Post Editorial: “Everyone agrees that something must be done about runaway debt and spending. Or at least that’s what we’d like to think … We are disappointed the Obama administration has decided to double down on the status quo by submitting a 2012 budget plan of $3.73 trillion in spending, or 25 percent of gross domestic product — the highest level since World War II. The budget would add $8.7 trillion of new spending — and $7.2 trillion to the federal debt — over the next 10 years … Obama called the proposal one of “tough choices and sacrifices,” yet it does not confront entitlements and continues to act as if government spending is the way to prosperity.”  Link

Detroit News Editorial: “Obama’s budget, while commendable for containing any amount of spending reductions, falls well short of the recommendations from his own deficit reduction commission, which would cut the deficit by $3.5 trillion over the decade. Getting there would require a good deal of sacrifice, but that’s the only way to make a substantial dent in the deficit … The commission’s plan has never received the serious airing in Congress that it deserves. That’s because it touches the sacred cows of Social Security and Medicare, and kills some cherished tax credits. And even though Obama formed the commission, he hasn’t championed its ideas.”  Link

Investor’s Business Daily Editorial: “Obama seems to be playing a political game of chicken with the Republicans — betting they won’t have the guts to make the cuts that he refuses to make.  And if they do, he’ll blame them for the pain that results.  No doubt that’s why he totally ignored his own “bipartisan” deficit-cutting commission, which in December recommended big spending cuts and entitlement reform to reduce future budget shortfalls. Obviously, Obama took his copy of the report and shredded it.”  Link

Los Angeles Times Editorial: “President Obama’s budget for fiscal year 2012 landed with a thud Monday, laying out short- and long-term tax and spending plans that disappointed lawmakers on both sides of the aisle … The proposal was a remarkably tame response to Washington’s fiscal problems, not the bold statement about belt-tightening that the White House had suggested was coming.  Yet the biggest shortcoming is that it all but ignored the most important long-term financial challenge, which is the growing cost of entitlements such as Medicare and Medicaid.”  Link

Minneapolis Star-Tribune Editorial: “The flurry of deficit-reduction plans released late last year were supposed to kick off a national adult conversation about the nation’s metastasizing long-term debt problem.  So when is that conversation going to begin?  It certainly didn’t happen on Monday when President Obama released his $3.7 trillion budget request for 2012 … While the president’s plan included some painful cuts that should stabilize the nation’s debt level relative to its economic output, it continued the reckless fiction that the country’s books can be balanced without reforming these expensive entitlement programs: Medicare, Medicaid and Social Security.”  Link

New York Times Editorial: “What Mr. Obama’s budget is most definitely not is a blueprint for dealing with the real long-term problems that feed the budget deficit: rising health care costs, an aging population and a refusal by lawmakers to face the inescapable need to raise taxes at some point. Rather, it defers those critical issues, in hopes, we assume, that both the economy and the political environment will improve in the future … For the most part, Mr. Obama has managed to cut spending while preserving important government duties. That approach is in stark contrast to Congressional Republicans, who are determined to cut spending deeply, no matter the consequences.”  Link

Scripps Howard News Service Editorial: “Congress must shortly confront two critical budget matters. By March 4, it must vote to extend a resolution funding continued federal operations for the year or risk a government shutdown and later this spring to increase the government’s borrowing authority or risk the U.S. defaulting on its debts … The hope is that these issues will force the two parties to come to some kind of grand bargain on tax and entitlement reform to finally solve the problem of recurring deficits. But like some of the president’s economic assumptions, that may be overly optimistic.”  Link

USA Today Editorial: “President Obama likes to talk about those “Sputnik moments” when the nation rises to difficult challenges like the one posed by the Soviet space program in the 1950s. On Monday, he had a chance to turn his federal budget proposal into his own such moment. He whiffed … Obama and his aides boasted that the administration’s spending plan would shave $1.1 trillion off anticipated deficits over 10 years. For a Democratic president to propose cuts in programs with strong Democratic constituencies is a measure of how the national dialogue on spending has shifted. But, as it happens, $1.1 trillion is the projected deficit for 2012 alone. Talk about insufficient.”  Link

Wall Street Journal Editorial: “This was supposed to be the moment we were all waiting for. After three years of historic deficits that have added almost $4.5 trillion to the national debt, President Obama was finally going to get serious about fiscal discipline. Instead, what landed on Congress’s doorstep on Monday was a White House budget that increases deficits above the spending baseline for the next two years. Hosni Mubarak was more in touch with reality last Thursday night.”  Link

Washington Post Column by Dana Wilbanks: “Obama’s budget proposal is a remarkably weak and timid document. He proposes to cut only $1.1 trillion from federal deficits over the next decade – a pittance when you consider that the deficit this year alone is in the neighborhood of $1.5 trillion. The president makes no serious attempt at cutting entitlement programs that threaten to drive the government into insolvency … The best explanation the White House has come up with, uttered privately, is that Obama didn’t want to step out too far with politically unpopular cuts before congressional Republicans propose their own.” Link

Mike Klein is Editor at the Georgia Public Policy Foundation.  The opinions are those of news organizations and writers who were quoted and they should not be attributed to the Georgia Public Policy Foundation, which has no opinion.

February 15, 2011 Posted by | Uncategorized | , , , , , , , , , , , , , | Leave a comment

WSJ Economics Writer: U.S. Cannot Borrow Its Way to Prosperity

Stephen Moore remembers asking his son, who’s the best basketball player in the world?  They agreed, it’s LeBron James, who earns about $40 million per year in salaries and endorsements.  Moore posed a question to his son: how long would it take LeBron James to earn $1 trillion?  The answer is a staggering 25,000 seasons.  Not even Michael Jordan played that long!

Moore delivered the economic keynote address at this past weekend’s conference hosted by the Georgia Public Policy Foundation and the Conservative Leadership Policy Institute.  Moore is the Wall Street Journal’s senior economics writer, a member of its editorial board, the author of six books and a former senior economist on the Congressional Joint Economic Committee.

Here’s the point Moore made with his LeBron James example:  We hardly know what $1 trillion means even as we watch the federal government routinely run debt into the several trillions.

“We have spent too much money, we have borrowed too much money, we have printed too much money and we have taken too much power from the states,” Moore said.  “Milton Friedman taught us this 30 or 40 years ago.  There’s no free lunch.  If Washington or the state of Georgia spends a dollar, that dollar has to come from somewhere.”

Last week the National Commission on Fiscal Responsibility and Reform floated a draft report with ideas to reduce the national debt by $4 trillion over 10 years.  Dozens of proposals would significantly change Social Security, other federal entitlements and discretionary spending.

Moore’s remarks in Atlanta on Saturday are timely because of that report, and also because Congress went back to work Monday, ready to argue about what to do with your money.

Tuesday’s agenda will include the Senate debate on funding earmarks.  Thursday’s action will move to the White House where President Barack Obama, Democratic and Republican leaders seem ready to dig in their heels about extension of Bush-era federal income tax cuts.  Congress also needs to fix the alternative minimum tax for 2010 taxpayers before the holiday break.

Stephen Moore

“We had better make sure we extend all the Bush tax rates come next January,” Moore told 250 conference attendees.  “If you want to balance the budget in Washington, if you want to balance the budget here in Atlanta, you want more rich people.”

Here’s why:  Rich people invest; investment triggers growth; growth triggers more employment; employed people purchases products and services and employed people pay taxes, exactly the opposite of unemployed people who require government services paid for by employed people.

Moore believes the nation has arrived at a critical historical point:   “The number one issue is this, what country is going to be the global number one super power?  For our lives, the United States has been a force for good.  We’ve led the world.

“But now for the first time in our lives we have an honest to god rival.  And who is that; China, now becoming one of the most prosperous countries in the world.  China predicts in 18-to-20 years that it will catch the United States,” Moore said.

“China is focused right now like a laser beam on competitors.  They have their eye on the ball.  That’s what we need to do as a nation and that’s what we need to do in Georgia.  Everything you do, make sure you keep in mind, is this going to make Georgia more competitive?

“Step one and I’m deadly serious about this: Abolish the state income tax.  This is not a radical idea. There are nine states in this country that have no state income tax,” Moore said.  “Texas, Florida, Tennessee; these states are able to pay their bills without having an income tax.  It’s so obvious; the states without an income tax are the ones that have driven growth.”

Georgia’s Special Council on Tax Reform is expected to propose some revisions to the state’s 6% individual income tax when it reports to the General Assembly in January.  Sources say it might propose reduced individual income tax rates in a new model that would move taxation away from earned income and toward taxation of services and products purchased.

Moore predicted the Republican majority U.S. House will pass a bill to repeal Obamacare, the Senate will not and health care will become “death by a thousand cuts.”  He predicted the individual mandate will be eliminated.  “What we need to do with health care is, we need to allow states to begin to experiment.  Let people buy insurance from anywhere they want to.”

Moore started his address with this idea: “The election we just saw was not a victory for the Republican Party.  It was a victory for the conservative movement and free market principles.”  He finished with this idea:  “Both parties are still fighting with each other.  It’s like none of them learned the lesson.”

Mike Klein is Editor at the Georgia Public Policy Foundation.

November 15, 2010 Posted by | Uncategorized | , , , , , , , | Leave a comment