{"id":236507,"date":"2010-01-27T10:14:14","date_gmt":"2010-01-27T15:14:14","guid":{"rendered":"http:\/\/www.szone.us\/f95\/morning-bell-president-obama-right-we-have-spending-problem-38667\/"},"modified":"2010-01-27T10:14:14","modified_gmt":"2010-01-27T15:14:14","slug":"morning-bell-president-obama-is-right-we-have-a-spending-problem","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/236507","title":{"rendered":"Morning Bell: President Obama Is Right, We Have A Spending Problem"},"content":{"rendered":"<div>On 01.27.10 06:29 AM posted by Conn Carroll<\/p>\n<p>Tonight in his State of the Union address, President Barack Obama is expected to propose a <a href=\"http:\/\/www.washingtonpost.com\/wp-dyn\/content\/article\/2010\/01\/25\/AR2010012503549.html\" >&#8220;freeze&#8221;<\/a> on government spending. Obama&#8217;s spending &#8220;freeze&#8221; will only last three years, will not start until 2011, will only apply to a $447 billion slice of the federal government&#8217;s $3.5 trillion budget, and will not apply to any of the unspent $862 billion stimulus plan, his health care plan or the House of Representatives&#8217; additional $156 billion stimulus plan. Despite all the loopholes, time limits and procrastination, the President should still be commended for beginning to acknowledge reality. And as a <a href=\"http:\/\/www.cbo.gov\/ftpdocs\/108xx\/doc10871\/01-26-Outlook.pdf\" >new report<\/a> issued yesterday by the Congressional Budget Office (CBO) shows, the reality is this: the U.S. government has an insatiable spending problem.<\/p>\n<p> The CBO&#8217;s summary of <a href=\"http:\/\/www.cbo.gov\/ftpdocs\/108xx\/doc10871\/01-26-Outlook.pdf\" >the report<\/a> is bad enough: &#8220;Under current law, the federal fiscal outlook beyond this year is daunting &#8230; accumulating deficits will push federal debt held by the public to significantly higher levels. At the end of 2009, debt held by the public was $7.5 trillion, or 54% of GDP; by the end of 2020, debt is projected to climb to $15 trillion, or 67% of GDP.&#8221; But as bad as those numbers are, our fiscal health is actually worse. The CBO is forced by Congress to make a number of unrealistic assumptions about future revenue and spending changes. But their report makes up for this by including alternative projections that make more realistic assumptions. Heritage fellow Brian Riedl <a href=\"http:\/\/www.heritage.org\/Research\/Budget\/wm2780.cfm\" >crunched those numbers <\/a>and found:<\/p>\n<ul>\n<li>The public debt &#8212; $7.5 trillion at the end of 2009 &#8212; is projected to triple to $22.1 trillion by 2020.<\/li>\n<li>Over what would be President Obama&#8217;s eight years in office if re-elected, baseline budget deficits are projected to total $9.7 trillion &#8212; nearly triple the $3.3 trillion in deficits accumulated by President George W. Bush.<\/li>\n<li>By 2020, the budget forecasts a $1.9 trillion annual budget deficit, a public debt of 98 percent of GDP and annual net interest spending surpassing $1 trillion. <\/li>\n<\/ul>\n<p> Our country simply cannot afford to be spending $1 trillion in net interest in 2020. So what is the driving force behind these unsustainable deficits? Unprecedented rises in government spending. More Riedl numbers:<\/p>\n<ul>\n<li>Since World War II, federal spending has generally remained between 18 and 22 percent of GDP. During the Bush Administration, spending increased from 18.4 to 20.9 percent of GDP.<\/li>\n<li>Discretionary spending has increased 25 percent in three years &#8212; not even counting the $311 billion in discretionary stimulus spending and approximately $150 billion in annual spending on the global war against terrorists.<\/li>\n<li>In 2009, federal spending reached 24.7 percent of GDP &#8212; the highest level in American history outside of World War II. Non-defense spending reached an all-time record of 20.1 percent of GDP. <\/li>\n<\/ul>\n<p> Comparing our government&#8217;s prolific spending habits with the decline in revenues from the recession, Riedl concludes: &#8220;Between 2010 and 2020, recession-depleted revenues are projected to gradually rebound to 17.6 percent of GDP (slightly below the 18.3 historical average). Spending is projected expand to 25.9 percent of GDP &#8212; well above 20.7 historical average. Compared to those averages, <b>88 percent of all additional deficits by 2020 come from additional spending<\/b> (5.2 percent of GDP above average), and only 12 percent comes from low revenues (0.7 percent of GDP below average).&#8221;<\/p>\n<p> So 88% of all of our crippling debt problems come from our government&#8217;s inability to control its spending habits. Put in this light, President Obama&#8217;s spending &#8220;freeze&#8221; is just a drop in the bucket. A credible commitment to reduce government spending would go much farther. For starters, the remaining TARP and stimulus funds should both be rescinded. Next, instead of the President&#8217;s fungible <a href=\"hhttp:\/\/www.realclearpolitics.com\/articles\/2010\/01\/25\/biden_economic_advisor_debates_spending_freeze_with_maddow_100045.html\" >&#8220;aggregate&#8221;<\/a> spending freeze, tough hard spending caps should be enacted. Finally, <a href=\"http:\/\/www.heritage.org\/Research\/Budget\/bg2114.cfm\" >Congress should disclose the massive unfunded obligations of Social Security, Medicare and Medicaid; put those programs on long-term budgets; and enact the necessary entitlement and programmatic reforms that can keep government within those limits.<\/a><\/p>\n<p> <b>Quick Hits:<\/b><\/p>\n<ul>\n<li>Due to the fact that President Barack Obama&#8217;s $787 billion stimulus failed to stem job losses, the Congressional Budget Office now says the scheme will cost American taxpayers <a href=\"http:\/\/www.washingtontimes.com\/news\/2010\/jan\/27\/stimulus-price-tag-soars-as-jobless-rate-rises\/\" >$862 billion<\/a>, thanks to a higher than expected unemployment benefits total.<\/li>\n<li>Sens. Evan Bayh (D-IN) and Blanche Lincoln (D-AR) say they <a href=\"http:\/\/tpmdc.talkingpointsmemo.com\/2010\/01\/lincoln-bayh-nelson-wont-support-passing-health-care-fixes-via-reconciliation.php\" >won&#8217;t support a deal with the House<\/a> to pass selective parts of their health care bill through the Senate using reconciliation, and Sen. Ben Nelson (D-NE) says Congress should start over entirely.<\/li>\n<li>The leaders of the 9\/11 Commission &#8212; former-New Jersey Gov. Thomas Keane (R) and former-Rep. Lee Hamilton (D-IN) &#8212; told a Senate panel Tuesday <a href=\"http:\/\/washingtontimes.com\/news\/2010\/jan\/27\/911-panel-chiefs-fault-handling-of-bomb-suspect\/\" >the Obama administration mishandled<\/a> the interrogation of the failed Christmas Day airline bomber.<\/li>\n<li>Sens. Blanche Lincoln (D-AR) and Jim Webb (D-VA) signed on to a letter to Attorney General Eric Holder <a href=\"http:\/\/www.politico.com\/news\/stories\/0110\/32021.html\" >condemning the Obama administration&#8217;s decision<\/a> to try Khalid Sheikh Mohammed in a civilian court.<\/li>\n<li>According to a new congressional report, <a href=\"http:\/\/www.washingtonpost.com\/wp-dyn\/content\/article\/2010\/01\/26\/AR2010012601265.html\" >the United States is still unprepared<\/a> to respond to the threat of large-scale bioterrorism. <\/li>\n<\/ul>\n<p><a href=\"http:\/\/blog.heritage.org\/2010\/01\/27\/morning-bell-president-obama-is-right-we-have-a-spending-problem\/\" >http:\/\/blog.heritage.org\/2010\/01\/27\/&#8230;nding-problem\/<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>On 01.27.10 06:29 AM posted by Conn Carroll Tonight in his State of the Union address, President Barack Obama is expected to propose a &#8220;freeze&#8221; on government spending. Obama&#8217;s spending &#8220;freeze&#8221; will only last three years, will not start until 2011, will only apply to a $447 billion slice of the federal government&#8217;s $3.5 trillion [&hellip;]<\/p>\n","protected":false},"author":4292,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-236507","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/236507","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4292"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=236507"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/236507\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=236507"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=236507"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=236507"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}