President Obama's spending
The US has run deficits greater than a trillion dollars four years in a row, and yet the president seems oblivious to the need for real spending cuts, writes Cato Institute's Chris Edwards
The new federal budget includes a range of accounting maneuvers to cast the administration’s 10-year projections in the best possible light. Senate Republicans point out some of President Obama’s funky accounting here. But note that the George W. Bush administration also used tricks to make deficit forecasts look more optimistic.
That’s why it’s useful to look at a president’s spending numbers for the current year and next year, rather than the make-believe numbers for later years in the budget. The chart shows total federal outlays since 2000 and Obama’s estimated spending for 2012 and proposed spending for 2013. Data are for fiscal years. Also, I’ve excluded TARP spending because reestimates of TARP costs distort the data.
Spending has gone up from $2.98 trillion in 2008—the year before Obama came into office—to a proposed $3.80 trillion in 2013. That is a 28 percent increase in five years, which represents a compound annual growth rate of five percent. Because the economy has stagnated during this period, spending has increased as a share of GDP.
Note that the lack of an overall spending increase in 2013 is not a victory for frugality. For one thing, spending on the 2009 “stimulus” bill peaked at $235 billion in 2010 and is now falling. It will be roughly $30 billion in 2013.
Similarly, Iraq/Afghanistan war costs peaked at $163 billion in 2010 and are expected to fall to $97 billion by 2013. There have been similar drop offs in spending for recession-related programs such as unemployment insurance.
Thus, as stimulus, war, and recession-related costs are falling by hundreds of billions of dollars, President Obama is using the money to increase spending on other programs. We have run deficits greater than a trillion dollars four years in a row, and yet the president seems oblivious to the need for real spending cuts.
Here’s a better fiscal plan, which focuses on ways to cut spending and balance the budget.
Chris Edwards is Director of Tax Policy Studies at the Cato Institute and editor of DownsizingGovernment. Before joining Cato, Edwards was a senior economist on the congressional Joint Economic Committee, a manager with PricewaterhouseCoopers, and an economist with the Tax Foundation. This article is used with permission from Cato
Read more on: Chris Edwards Cato Institute, Cato Institute, Cato Institute and Obama, Obama's Fiscal Year 2013 budget, Us deficit, Obama spending, and Obama stimulus package
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