Obama spends big now, talks austerity later — 10 years later

McClatchy NewspapersApril 5, 2009 

WASHINGTON — President Barack Obama boasts that he'll reduce spending on key domestic nondefense programs to their lowest levels since the 1960s, but he and Democrats in Congress are on a spending spree not seen since then.

Few analysts or members of Congress expect Obama to meet his cost-cutting goal, which he projects he won't meet for 10 years.

"Projections for future years rarely come true," said Marc Goldwein, policy director at the nonpartisan Committee for a Responsible Federal Budget.

Some Democratic lawmakers agreed.

"I don't see this in the next 10 years. We just have too many challenges we have to face," said Rep. G. K. Butterfield, D-N.C., who voted for the House of Representatives' Democratic budget on Thursday.

House and Senate negotiators will try later this month to craft a budget plan that looks ahead. Its most important goal, however, will be to set budget levels for fiscal 2010 — which starts on Oct. 1 — and they're expected to boost spending for non-defense discretionary programs by 7 to 9.5 percent for that year.

Obama has proposed to raise fiscal 2010 spending by 10.1 percent, citing the economic emergency. At the same time, though, he's talking as if his budget is a blueprint for fiscal austerity.

The president told a March 24 press conference that "as a percentage of gross domestic product, we are reducing non-defense discretionary spending to its lowest level since the '60s, lower than it was under Reagan, lower than it was under Clinton, lower than it was under Bush, or both Bushes."

What Obama didn't say is that, under his budget, that low percentage won't be reached until fiscal 2019. Even if Obama serves two terms, fiscal 2019 won't begin until nearly two years after he leaves office.

One clue to the administration's — and the Congress' — seriousness about holding spending in check could come this week, when Defense Secretary Robert Gates is expected to discuss the fate of several big-ticket weapons programs, including the Air Force's F-22 fighter and the Army's Future Combat Systems, which big defense contractors have been lobbying hard to keep.

White House Budget Director Peter Orszag estimates that by 2019, nondefense discretionary spending will drop to 3.1 percent of gross domestic product, the lowest level since the early 1960s.

OMB officials also point out that such spending over the next 10 years would average 3.6 percent of GDP under their plan, lower than the 40-year average of 3.8 percent. But such spending in 2010 — the year they're budgeting for now — is expected to reach 4.7 percent of GDP, considerably higher than the 40-year average.

Analysts and lawmakers see several problems with the 10-year projection.

First, the administration assumes that the economy will grow at an average of 2.6 percent annually, but it's impossible to predict that with certainty. The nonpartisan Congressional Budget Office envisions somewhat slower growth, but long-term economic forecasts are notoriously inaccurate.

Second, the political situation is likely to change over 10 years. Will Obama win a second term? Will he have to deal a Republican Congress? Will there be a new war, or an escalating old one, that sends military spending up?

Many recent presidents have painted similarly rosy scenarios, only to be upset by events.

Shortly after he took office in January 1981, President Ronald Reagan promised a balanced budget by fiscal 1984. But his huge tax cuts, military spending boosts and the nation's worst recession since the 1930s up to then combined to drive deficits sky high.

His successor, George H. W. Bush, said eight years later that he'd balance the budget by fiscal 1993. Instead, Bush in fiscal 1992 faced a then-record $290 billion deficit.

Only Bill Clinton was successful, predicting deficits around $180 billion by the end of his first term in 1997. A combination of strong deficit-reduction legislation, a booming economy and, after 1995, a Republican-led Congress, helped deliver a federal surplus from fiscal 1998 to 2001.

Under President George W. Bush, deficits returned after 9/11, the product of big tax cuts, spending increases on defense and homeland security, and a recession. Even so, in his final budget last year, Bush, too, pledged a balanced budget by 2012.

So much for projections from former presidents.

The CBO last month estimated the 2012 deficit under Obama's plan would be $658 billion.

Some lawmakers agree with Obama's goal of getting future deficits under control.

"We have to get it down to the levels the president wants, or we're all going to be out of office in a few years," said Rep. Bill Pascrell, D-N.J.

His is a lonely voice, however, because Democrats see nondefense discretionary spending on a path to increase this year and next at the highest inflation-adjusted rate since the 1960s.

"It's insane," said Rep. Gene Taylor, D-Miss. "This is the fourth president since I've been in the House who's said they were going to fix the deficit in later years. It only worked out for Bill Clinton."

Other Democrats were more circumspect.

"It disturbs me a bit," said Rep. Peter DeFazio, D-Ore., "but we're getting some good funding for transportation, and that's very important."

And they're making no promises about where the deficit will be in the future.

"The president," said Sen. Ben Nelson, D-Neb., "is ahead of his time."

ON THEWEB:

White House Budget Director Peter Orszag blogs on non-defense discretionary spending

Deficits and surpluses through the years

President">George W. Bush's proposed fiscal 2009 budget

House of Representatives 2010 budget fact sheet

President Obama's 2010 budget outline

House of Representatives Republican 2010 budget

MORE FROM MCCLATCHY

CBO: Obama's budget would double deficit over decade

Greatest threat to Obama spending plan? Democrats

Health-care overhaul could hinge on procedural gamble

Another Obama grassroots drive leaves lawmakers unfazed

McClatchy Newspapers 2009

McClatchy Washington Bureau is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service