Tag: federal budget

President Obama’s Budget: Higher Taxes & Bigger Government

“As soon as I took office, I asked this Congress to send me a recovery plan by President’s Day… Not because I believe in bigger government – I don’t. Not because I’m not mindful of the massive debt we’ve inherited – I am.”
     –President Obama to congressional joint session, February 24

President Obama said some encouraging words about federal spending in his first major speech as president, but the budget released by his administration today reveals a substantial disconnect between his rhetoric and his policy.

Americans have a fundamental choice to make in coming months: Do they want President Obama and Congress to impose huge increases in the size of government, perhaps as dramatic as occurred in the 1930s and 1960s?

Apart from defense, federal spending has hovered around 16.5 percent of the economy since 1980, through both Democratic and Republican administrations. But under President Obama, nondefense spending is soaring to 23 percent of the economy this year and will remain at historic high levels in the future.

Even after current stimulus spending is supposed to end, nondefense spending is expected to be more than 19 percent of the economy – or 25 percent more than the size of government during the later Clinton years.

Americans need to decide whether they want the European-sized government that President Obama is promising – with all its damaging effects on individual freedom and economic growth – or whether they want to return to the greater prosperity of the smaller-government Clinton years.

Cato Scholars Address Obama’s First Speech to Congress

President Barack Obama’s first address to Congress laid out a laundry list of new spending contained within the stimulus legislation and provided hints as to what will be contained in the budget - a so-called “blueprint for America’s future” - he’ll submit to the legislature. Cato Institute scholars Chris Edwards, Jim Harper, Gene Healy, Neal McCluskey, David Rittgers, John Samples and Michael D. Tanner offer their analyses of the President’s non-State-of-the-Union Address.

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Pentagon 1, Obama 0

Planning for the 2010 federal budget began in 2008. The Office of Management and Budget instructed agencies to prepare documents for the incoming administration showing “current services baselines” and program estimates for the coming fiscal year. That means “just explain what you’re spending now and project it forward for next year.” The idea was to allow the Obama appointees to shape the budgets quickly when they came into office.

The Pentagon, however, went through its normal budgeting process. It produced a budget that defied existing plans and expectations that FY 2009 would be the last year of the massive defense buildup that began in the last years of the Clinton administration. It adds $60 billion to the defense baseline above FY 2009 levels and $450 billion in planned spending over five years.

Many observers saw this as an attempt at a bureaucratic fait accompli, a move to lock the Obama administration into higher defense spending. According to this week-old story from CongressDaily, it worked. Megan Scully writes:

President-elect Obama’s choice for the no. 2 civilian slot at the Pentagon Thursday said he does not plan to make sweeping changes to the Defense Department’s fiscal 2010 budget request, which has been drafted.

When Obama decided to keep Robert Gates as Secretary of Defense, I asked whether we were keeping this defense budget and suggested that doing so would show that Obama will let the military services (who largely control the drafting of their budgets) push him around. For some time, the position of Democrats has been to give the Pentagon what it wants, either for fear of opening a line of attack for Republicans or because of agreement on the virtue of massive defense budgets.

This story suggests that little has changed. The FY 2010 increase will make any future decrease harder to achieve for political and programmatic reasons. This is one more sign that Obama’s occasional talk of realism and restraint in foreign and defense policy should not be taken seriously.

Clearly, the idea of scrubbing the budget “line by line” does not apply to agencies run in Virginia.

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