This budget is scary, but the future is horrifying

This budget is scary, but the future is horrifying

There’s something for everyone to hate in the $3.8 trillion budget proposed by President Barack Obama this week.

First of all, it contains a projected deficit of $1.6 trillion, an amount of money that the average person cannot comprehend. So let’s look at it this way. The federal debt is now $12.3 trillion, which is equivalent to $40,000 for every man, woman and child in the United States. Adding $1.6 trillion to that debt will add another $5,000 to the per capita tab. Every day for a year, your share of the debt will grow by about $14.

This ever-increasing level of debt is a product of the last 25 years and is unsustainable. Every president from Harry Truman through Jimmy Carter managed to reduce the debt as a percentage of the nation’s annual economic output, the GDP. Coming out of World War II, the debt was 117 percent of GDP. By the end of Carter’s term, it was 32.6 percent of GDP. And then it began rising. By the end of eight years of the Ronald Reagan presidency, it was at 53 percent; after four years of George H.W. Bush it was 66 percent. It leveled off during the first term of Bill Clinton and dropped to 57 percent at the end of his second term. It then climbed to 75.5 percent after two terms of George W. Bush. It will hit the 100 percent mark in Barack Obama first term, and will almost certainly reach post-World War II levels in the next president’s term, regardless of who that president might be.

Showing restraint

As frightening as that prospect is, the consequences of trying to abruptly turn off the federal spigot would be horrifying. The fragile state of the economic recovery precludes little more than Obama’s proposal to freeze spending in the next year.

The unsettling irony is that even while everyone in Washington recognizes that something has to be done, and many are telling Obama he is not doing enough, his critics — especially Republicans and blue dog Democrats who like to call themselves deficit hawks — were among the first to squawk about cuts.

A recommendation to scrap a Bush administration plan to return astronauts to the moon by 2020 came under fire from Sen. Richard Shelby, R-Ala., whose state is home to major NASA facilities. Ohio’s George Voinovich said Obama should have made tougher choices regarding Social Security, Medicare and Medicaid spending, but also criticized cuts in the NASA budget that could result in lost jobs in Cleveland. Democrat Bill Nelson of Florida joined in calling the NASA cuts shortsighted. And Sen. Mary Landrieu, D-La., criticized the administration’s plans to raise $40 billion by ending tax breaks for the oil and gas industry that benefit her home state.

And even while Congressman John Boehner of Ohio, the Republican minority leader in the House, was criticizing Obama for not making more cuts, his office issued a news release praising a fellow Republican for her role in keeping pressure on the administration to release $45 million for research and testing funds for a proposed uranium-enrichment plant in Piketon.

Everyone wants to trim the budget and cut the deficit — as long as none of the trimming is done in their backyards.

Pay as you go

At least the Senate managed to approve a new version of pay-as-you-go, which requires spending increases or tax cuts to be “paid for” with cuts to other programs or tax increases. It managed to get only the required 60 votes, with all 40 Republicans voting against it, including several who have supported it in the past (Ohio’s Voinovich and Arizona’s John McCain among them). The Republican explanation: it isn’t as tough as the prior pay-go provision. The fiscally conservative Republicans liked that provision so much that they allowed it to expire in 2002, when they controlled Congress and President George Bush was in the White House. Coincidentally, subsequent budget deficits every year nearly doubled the national debt, to more than $11 trillion when Obama took office.

During many of the years that the debt was ballooning, the American people were told that deficits don’t matter. That’s arguable only so long as deficits don’t exceed economic growth. It’s true only if there is a reasonable relationship between economic output and debt. It’s true as long as extraordinary debt is caused by spending to fight wars or recessions, and there is an expectation that the emergency will pass and economic sanity will be restored in relatively short order. This nation has become addicted to running on credit and now that we are waging two wars as well as a battle against a global recession, we’re in trouble.

We didn’t get into this position overnight, and we’re not going to get out of it in a day or a week. It is going to take years of discipline and work — by both parties — to reverse the trend. They should have started yesterday; they must start today.