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Obama Spending Freeze Left Out in Cold by Profligate Proposals | Print |  
Written by Michael Tennant   
Thursday, 27 January 2011 11:56

“The ledger did not appear to be adding up Tuesday night when President Barack Obama urged more spending on one hand and a spending freeze on the other,” writes Calvin Woodward of the Associated Press. Indeed, Obama’s State of the Union address, as well as the GOP response, consisted of little more than “a long jumble of contradictory statements and glittering generalities,” in the words of The New American’s Thomas R. Eddlem.

While calling for freezing domestic discretionary spending — thereby leaving open the possibility of increased outlays for foolhardy, unconstitutional foreign interventions — “Obama offered far more examples of where he would spend than where he would cut,” Woodward says, “and some of the areas he identified for savings are not certain to yield much if anything.”

For example, Obama insisted that his massive takeover of the healthcare system will “slow” the “rising costs” of Medicare and Medicaid, thus reducing the deficit. Woodward will have none of this, stating: “The idea that Obama’s health care law saves money for the government is based on some arguable assumptions,” primarily the notion that “steep cuts in Medicare spending, as called for in the law, will actually take place” — the main reason the Congressional Budget Office concluded that ObamaCare “will slightly reduce red ink over 10 years.” In fact, Congress has proved quite reluctant even to make planned, statutory cuts in Medicare reimbursement for doctors; the idea that these same politicians would slash the popular program is farfetched indeed.

The President “vowed to veto any bills sent to him that include ‘earmarks,’” Woodward writes, noting that if House Republicans are true to their word not to send any bills with earmarks to Obama, this promise will be well and truly meaningless. “Republicans,” he adds, “have taken the lead in battling earmarks while Obama signed plenty of earmark-laden spending bills when Democrats controlled both houses” and just last month would have signed an earmark-laden bill had it not been killed under pressure from conservative senators.

Furthermore, notes Woodward, Obama was previously supportive of earmarks, saying in 2009 that they “have given legislators the opportunity to direct federal money to worthy projects that benefit people in their districts.” Whether or not these projects are worthy, earmarks do serve a purpose: keeping control of spending in the hands of Congress, where it belongs, and allowing taxpayers to see exactly how, and by whom, their money is being spent. Moreover, as TNA editor Gary Benoit explained, while “appropriations that are earmarked can be wasteful, excessive, and unconstitutional,” so can “appropriations that are not earmarked.” Spending as a whole needs to be slashed, not just the relatively small portion that is earmarked. Taking a tough stance on earmarks merely affords Obama the opportunity to look like he is serious about reducing spending while doing very little to curb it.

Congressional Republicans have for a long time sought to pass federal laws limiting jury awards in medical malpractice cases. In his speech Obama indicated his willingness to consider “medical malpractice reform to rein in frivolous lawsuits. But as Woodward points out, “Obama has expressed openness before to this prominent Republican proposal, but it has not come to much,” not least because “trial lawyers, major political donors to Democratic candidates, are strongly opposed to caps on jury awards.” Obama “appears to be offering” support for “state efforts” to limit jury awards, says Woodward, and in this case the President has the better of the constitutional argument. Nothing in the Constitution, after all, grants the federal government power over the outcomes of trials in state and local courts — something the Republicans who opened this session of Congress with a reading of that document would do well to recall. They might instead consider Rep. Ron Paul’s (R-Texas) proposal to give Americans a tax credit for the purchase of negative outcomes insurance before medical treatment, which he believes will help reduce “the burden of costly malpractice litigation on the health care system.”

Again contradicting his pledge to freeze domestic spending, Obama announced a goal of providing “80 percent of Americans access to high-speed rail” within 25 years. Woodward mentions that “there are many major hurdles to be overcome” in accomplishing this, including the cost, estimated to be $500 billion to $1 trillion, and the unlikelihood “that all service will be truly high-speed.” Then there’s the matter that the federal government has no constitutional authority to be subsidizing railroads — which has never prevented such subsidies in the past — and that government railroads are always money pits, as witness the history of Amtrak, which failed to make its own high-speed rail service work a few years ago.

When he created the Fiscal Commission in 2010 to recommend ways to salvage the debt-ridden U.S. government, Obama promised that the commission would not be “one of those Washington gimmicks.” According to Woodward, however, Obama “has yet to sign on to any of the ideas” put forth by the panel, and his State of the Union remarks indicate that he still has no intention of taking the commission’s recommendations to heart. Those recommendations were, first and foremost, to cut spending at triple the rate that new revenue is raised — “a painful mix of spending cuts and tax increases,” in Woodward’s prose. In his speech Obama turned that dose of reality into a mere exhortation “to cut excessive spending wherever we find it.” In addition, as regards Social Security, one of the biggest drains on the federal budget — and one that is only getting bigger by the day as the Baby Boomers retire — Obama timidly requested “a bipartisan solution to strengthen” the program, a far cry from the hefty spending cuts the commission recommended. Instead it is yet another Washington gimmick to make it look like he is doing something about Social Security’s insolvency while in reality he is kicking the can down the road a few years for the next President to deal with it.

Obama’s ledger doesn’t even come close to balancing. He is calling for $400 billion in reduced deficit spending over the next ten years — “only 5 percent of the expected $8.5 trillion in additional deficit spending expected over the next decade,” according to Eddlem — while refusing to consider serious cuts in budget-busters like Social Security and rattling off a list of new spending initiatives sure to dwarf the minuscule savings to be realized from his supposed spending freeze. It all adds up to bigger government, more debt, and an ever faster-approaching fiscal crisis. Greece, here we come.

Photo: President Barack Obama delivers his State of the Union address on Capitol Hill in Washington, Tuesday, Jan. 25, 2011: AP Images

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