Obama Slashes Spending, Increasing Massively!

I can’t help but be bemused by the YahooNews headline “Obama promises to slash spending by $2 trillion,” which accompanies an AP story quite contrary to that.

President Barack Obama unveiled a multi-trillion-dollar spending plan Thursday that would boost taxes on the wealthy, curtail Medicare, lay the groundwork for universal health care and leave a string of deficits dwarfing any in the nation’s history.

In addition to sending Congress his $3.55 trillion budget plan for 2010, Obama proposed more immediate changes that would push spending to $3.94 trillion in the current year. That would result in a record deficit Obama projects will hit $1.75 trillion, reflecting the massive spending being undertaken to battle a severe recession and the worst financial crisis in seven decades.

As part of the effort to end the crisis, the administration proposes boosting the deficit by an additional $250 billion this year, enough to support as much as $750 billion in increased spending under the government’s rescue program for banks and other financial institutions. That would more than double the $700 billion bank bailout passed by Congress last October.

He’s proposing record levels of spending. (I mean, what does he think a stimulus is?  It’s spending — that’s the whole point! Seriously.)  Yet, he’s getting credit for slashing spending?!   Dave Schuler attempts to translate:

He’s also pledged to cut the deficit in half by the end of his first term. Another sleight of hand?

In doing that he’s pledging that the deficits over the next four years will be larger, again in dollar terms, than the deficits of any of his predecessors. At the end of the budget-cutting process, if any, halving the budget would mean a deficit of just under $1 trillion and he’d have increased the public debt by 40% in just four years. If the GDP actually contracts over the next couple of years, those deficits could end up being larger than any previous deficits as a percentage of GDP as well. And, depending on how much the defense budget is cut (if at all) and what interests rates are in four years, it’s not beyond the realm of possibility that debt service could exceed defense as a proportion of the total budget.

So, sure, he’s massively increasingly the budget.  But he has pledged to cut it later.  So, in the out years, spending will be lower than it will be after he’s increased spending.  QED:  A budget cut.

Gotta love Washington.

Photo: DavidDMuir.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College. He's a former Army officer and Desert Storm veteran. Views expressed here are his own. Follow James on Twitter @DrJJoyner.


  1. odograph says:

    As long as everyone understands what countercyclical spending is, we can begin the discussion on a good foot

  2. Years back, Democrats succeeded in popularly defining a cut to government largesse as anything less than what they proposed. How is this any different?

  3. odograph says:

    It’s different Charles, because on the surface it promises a genuine cycle of stimulus spending and recovery. In the old dark days of Democratic entitlement expansion, it was all in permanent expenditures.

  4. Steve Verdon says:

    I wont believe that all of the current increases under the umbrella of “countercyclical” are temporary until they are no longer in the budget. In other words, temporary spending increases seem to have a way of becoming permanent.

  5. odograph says:

    But they aren’t “in the budget” going forward Steve. We’ve all seen the graphs of expenditure per year. Some (including you, I believe) don’t like that the high point of the curve is in 2010 or 2011, but we’ve all seen it tail off after that.

    example graph

  6. It’s different Charles, because on the surface it promises a genuine cycle of stimulus spending and recovery.

    Surely, you can’t be serious. But I’ll agree the apparent beauty is only skin deep.

    As for off budget, perhaps you’d like to take a whack at the partisanship motivating governors to reject additional unemployment money now because of required rule changes that will leave them holding the bag for unfunded mandates later, ubnless Steve is right that the faucet is stuck open.

  7. odograph says:

    I don’t think it is Charles. There are at least two ways to pass tax or spending laws. As temporary increases or decreases, which require a new Congressional vote to continue them, or as continuing law, which requires a vote to stop them.

    Here you’ve got a one-time stimulus bill, with a nicely tailed distribution of spending, without even a hint of “pass a continuing resolution in 2012 to continue.”

    It is actually structured to tail out.

    It’s kind of crazy to treat laws that require new votes to start again as equal to laws that require new votes to stop.

  8. odograph says:

    BTW, I realize Republicans have difficulty with the word “temporary.” The are the ones after all who consider the expiration of their own “temporary” tax cut as a “tax increase.”

    Interesting semantics.

  9. I’m not a Republican and you’re not responding to the question.

  10. odograph says:

    I thought you said “perhaps you’d like to take a whack” Charles?

    I considered it a change of subject from the big picture to the small. There is no reason I have to follow, especially if I think the change of subject is to move from my original claim.

    If you think this “unemployment money” is a big picture item, just tell me the percentage of the stimulus committed to it.

    (Make it Republicans and fellow travelers.)

  11. Dennnis Neylon says:

    Spending increases in Washington are nearly always permanent because no one ever actually seems to cut any spending, with the exceptions of defense spending, which Democrats always believe is too high and Republicans always believe is not high enough and foreign aid, which Democrats always believe is not high enough and Republicans never quite sure if it is or not. The biggest farce is money to states to comply with Congressional mandates which is almost never enough to comply with Congress’ rules of what states should spend (Congress always knows best when it comes to how much money any body should spend on anything, because, you know, they’re in Congress and they have all the answers). The promised “cuts” in farm aid, Medicare/Medicaid payments, “Tax loopholes” and “eliminating waste” are the boilerplate smoke and mirrors we hear every budget cycle. Farm aid will not be cut (it may not grow as much), Medicare/Medicaid payments may not grow as much, and no member of Congress who wants to be re-elected will vote to raise taxes or cut funding for anything that has a lobbyist to represent it.

  12. odograph says:

    Dennnis, you don’t need to “cut” things that “expire.”

    When you talk about “farm aid, Medicare/Medicaid payments” you are talking about things that are continuing funding. Those don’t expire, tend to get adjusted upward, and all the bad stuff.

  13. Dennnis Neylon says:

    I will believe they expired when they actually expire and are not renewed. Remember how Clinton’s plan to hire vastly more beat cops was temporary? And Obama’s new budget plan includes funding for (drum roll) more beat cops (rim shot). Government spending may be scheduled to expire, but more often programs are renewed. Programs develop constituencies and lobbyists who work to keep them alive, no matter what the original intent was (and me thinks the original intent is often just that — call it temporary, knowing that once in place, it will be nearly impossible to let it die).