Another Year, Another Can Kicked

Obama Has Repeatedly Failed To Lead, Leaving Dire Consequences For Future Generations

A TRUSTEE REPORT REVEALS THAT MEDICARE AND SOCIAL SECURITY ARE “ON A FAST TRACK TO DEEP FISCAL PROBLEMS”

THEN: President-Elect Obama In 2009: “What We Have Done Is Kicked This Can Down The Road. We Are Now At The End Of The Road And Are Not In A Position To Kick It Any Further.” (Michael D. Shear, “Obama Pledges Entitlement Reform,” The Washington Post, 1/16/09)

• Obama Said He Would Solve The Insolvency Of Our Entitlement Programs On His Watch. OBAMA: “We have to signal seriousness in this by making sure some of the hard decisions are made under my watch, not someone else’s.” (Michael D. Shear, “Obama Pledges Entitlement Reform,” The Washington Post,1/16/09)

NOW: “Medicare And Social Security Are On A Fast Track To Deep Fiscal Problems, Trustees For The Two Programs Warned Monday.” (Sam Baker, “Medicare, Social Security Funds Running Out Quickly, Trustees Say,” The Hill , 4/23/12)

“A Bad Economy And Higher Energy Prices Have Worsened The Finances Of Social Security , Shortening The Life Of The Trust Funds That Support The Program By Three Years.” “The government says a bad economy and higher energy prices have worsened the finances of Social Security, shortening the life of the trust funds that support the program by three years.” (Stephen Ohlemacher, “Poor Economy Worsens Social Security’s Finances,” The Associated Press , 4/23/12)

Social Security’s Trust Fund Will Be Exhausted By 2033, Three Years Earlier Than Predicted Last Year. “By 2024, the trustees said, Medicare’s trust fund won’t be able to cover seniors’ hospital benefits. Social Security is expected to reach the same tipping point in 2033 – three years earlier than the trustees estimated last year.” (Sam Baker, “Medicare, Social Security Funds Running Out Quickly, Trustees Say,” The Hill , 4/23/12)

Medicare Is Projected To Run Out Of Money By 2024. “Medicare’s hospital insurance fund is projected to run out of money in 2024, which is unchanged from last year. The trustees, however, said Medicare spending continues to rise.” (Stephen Ohlemacher, “Poor Economy Worsens Social Security’s Finances,” The Associated Press , 4/23/12)

The Trustees Project That Medicare’s Hospital Insurance Trust Fund Revenues Will Fall Short Of Expenditures “In All Future Years Under Current Law.” “The Trustees project that HI tax income and other dedicated revenues will fall short of HI expenditures in all future years under current law. The HI trust fund does not meet either the Trustees’ test of short-range test of financial adequacy or their test of long-range close actuarial balance.” (“2012 Annual Report Of The Boards Of The Trustees Of The Federal Hospital Insurance And Federal Supplementary Medical Insurance Trust Funds,” The Boards Of Trustees, 4/23/12)

The Disability Fund Will Run Out Of Money In 2016, A “More Dire Assessment.” “New projections in March gave a more dire assessment of the disability program, which has seen a spike in applications as more disabled workers lose jobs and apply for benefits. The nonpartisan Congressional Budget Office said the disability fund would run out of money in 2016. Social Security’s trustees are again urging Congress to shore up the disability system by reallocating money from the retirement program, just as lawmakers did in 1994.” (Stephen Ohlemacher, “Poor Economy Worsens Social Security’s Finances,” The Associated Press , 4/23/12)

OBAMA ADMITS THAT HIGH DEFICITS “MAKE IT HARDER FOR THE ECONOMY TO GROW,” YET HE CONTINUES TO PRODUCE HIGH DEFICITS

Obama Believed That A Failure To Control The Deficit Would “Make It Harder For The Economy To Grow.” “Obama wants to reduce the deficit because he’s concerned that over time, federal borrowing will make it harder for the U.S. economy to grow and create jobs, said the official, speaking on the condition of anonymity.” (Hans Nichols, “Obama Plans To Reduce Budget Deficit To $533 Billion By 2013,” Bloomberg, 2/21/09)

• Obama Recognized That If We Failed To Control Our Debt It Could Lead To A Double-Dip Recession. OBAMA: “It is important though to recognize if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession.”(Fox News, ” Interview With Major Garrett,” 11/18/09)
• Watch Obama Admit The Risks In Failing To Control The Debt

But His Policies Increase The Deficit To Unsustainable Levels Which Will Hamper Economic Growth

According To CBO, The High Deficits Produced By Obama’s FY2013 Budget Will Reduce Economic Output. “The nonpartisan Congressional Budget Office said Friday that President Obama’s 2013 budget will hurt the economy in the long term, arguing the larger deficits it would produce would reduce the amount of capital available to businesses. After five years, the CBO says, the Obama proposals would reduce economic output by between 0.5 percent and 2.2 percent.” (Erik Wasson, “CBO Estimates Obama 2013 Budget Will Hit Economic Growth,” The Hill’s “On The Money,” 4/20/12)

Obama’s FY2013 Budget Increases The Deficit More Than His FY2012 Budget And Will “Have A More Negative Long-Run Effect.” “The effects of the 2013 budget differ from those of the preceding budget in four main ways. In particular, the proposals for 2013 would do the following: Increase deficits by a greater amount, largely because of a greater increase in spending compared with that in CBO’s baseline. Those larger deficits would provide a bigger short-run boost to output but then have a more negative long-run effect.” (“The Economic Impact Of The President’s 2013 Budget,” Congressional Budget Office, 4/20/12)

“Larger Deficits Caused By The Budget Would Cause The Government To Issue More Bonds, Sucking Up Private Capital To Finance Its Debts And Thereby Reducing The Funds Businesses Could Use To Expand And Hire, The CBO Said.” “Larger deficits caused by the budget would cause the government to issue more bonds, sucking up private capital to finance its debts and thereby reducing the funds businesses could use to expand and hire, the CBO said. An increased tax on capital gains included in the president’s plan would also tend to reduce private capital, it says.” (Erik Wasson, “CBO Estimates Obama 2013 Budget Will Hit Economic Growth,” The Hill’s “On The Money,” 4/20/12)

• “Slower Economic Growth Tends To Increase Deficits By Reducing Tax Collection And Increasing Spending On Items Like Unemployment Insurance.” (Erik Wasson, “CBO Estimates Obama 2013 Budget Will Hit Economic Growth,” The Hill’s “On The Money,” 4/20/12)

Obama’s FY2013 Budget Would Increase The Deficit By As Much As $3.6 Trillion By 2022. “Before their overall economic effects are taken into account, the President’s proposals would add $2.0 trillion to budget deficits over the 2018-2022 period, CBO estimates. The budgetary feedback from the economic effects increases the cumulative projected cost of the proposals in that period by between $0.1 trillion and $0.4 trillion, depending on which model and which assumptions are used in the analysis (see Table 5). Thus, taking economic effects into account raises the projected increase in deficits under the President’s proposals to between $2.1 trillion and $2.4 trillion, relative to those under current law. As a result, projected deficits total between $3.3 trillion and $3.6 trillion over the 2018-2022 period.” (“The Economic Impact Of The President’s 2013 Budget,” Congressional Budget Office, 4/20/12)

• Under Obama’s FY2013 Budget, Deficits Would Total $6.4 Trillion By 2022. “In all, between 2013 and 2022, deficits would total $6.4 trillion (or 3.2 percent of total GDP projected for that period), $3.5 trillion more than the cumulative deficit in CBO’s baseline.” (“The Economic Impact Of The President’s 2013 Budget,” Congressional Budget Office, 4/20/12)

OBAMA HAS FAILED TO LEAD ON THE BUDGET, INSTEAD CHOOSING TO KICK THE CAN DOWN THE ROAD

President Obama “Has Been All-Too-Willing To Avoid Making Tough Decisions.” “One of President Obama’s political weaknesses in his first term has been that he’s all-too-willing to avoid making tough decisions, hesitant to expend political capital for potential long-term gain. Throughout his first term in office, he’s had a cautious governing style, and has avoided taking on some of his party’s core constituencies.” (Josh Kraushaar, “Obama Trying To Have It Both Ways,” National Journal, 11/30/11)

Treasury Secretary Tim Geithner Admitted That The Administration Doesn’t Have A Plan, But “We Don’t Like Yours.” GEITHNER: “What our budget does is get our deficits down to a sustainable path over the budget window. Why do they take off again? Why do they do that?” REP. PAUL RYAN: “Because we got 10,000 people retiring every day, and healthcare costs going up…” GEITHNER:”That’s right. We have millions of Americans retiring every day, and that will drive substantially the rate of growth of healthcare costs. You are right to say we’re not coming before you today to say we have a definitive solution to that long-term problem. What we do know is, we don’t like yours.” ( Committee On The Budget, U.S. House Of Representatives, 2/16/12)

Obama’s FY2013 Budget Was Essentially The Same Framework He Proposed In September. “President Barack Obama will release his budget plan next week, calling for $3 trillion in deficit reductions over 10 years, including $1.5 trillion in tax increases to fall mostly on the wealthiest Americans. If that sounds familiar, it’s because the president essentially laid out his budget plan in September, following a failed bipartisan deficit-reduction deal.” (Laura Meckler, “Budget Plan Has Familiar Ring,” The Wall Street Journal, 2/7/12)

• Los Angeles Times : Obama “Offers No Real Solution To The United State’s Long-Term Fiscal Problems.” “The day after the Greek Parliament approved another round of deep spending cuts in the face of violent protests, President Obama released a budget proposal for the coming fiscal year that offers no real solution to the United States’ long-term fiscal problems.” (Editorial, “What About The U.S. Debt?” Los Angeles Times, 2/14/12)
• The Washington Post: “The Final Budget Of His First Term Does Not Reflect The Leadership On Issues Of Debt And Deficit That Mr. Obama Once Vowed.” (Editorial, “Obama’s Budget Falls Short, But It Beats Many Alternatives,”The Washington Post, 2/13/12)

Obama Failed To Lead On His Past Budgets, Maybe Because He Doesn’t Think They “Actually Have Any Meaning”

Obama, When Constructing His FY2010 Budget: “Let’s Not Get In A Holy War Over Things That Don’t Actually Have Any Meaning.” “Obama felt the federal budget he and his team had to prepare in February played ‘into every annoying thing about Washington,’ as Peter Orszag, the former budget director, put it. …’It’s all a Kabuki thing,’ he said with exasperation, and he did not want to participate any more than necessary. ‘Let’s not get in a holy war over things that don’t actually have any meaning,’ he counseled his staff-words that took on special irony years later, when budget battle resulted in the gravest defeat of his presidency.” (Jodi Kantor, The Obamas, 2012, p. 60-61)

Obama’s FY 2011 Budget Ignored Looming Cost Of Social Security. “By contrast, the rising costs of Social Security, Medicare (beyond just the drug benefit), Medicaid, and net interest are responsible for nearly 5 percent in additional deficits as a share of GDP by 2020. Yet the President failed to mention this spending as driving long-term budget deficits.” (Brian Riedl, “Obama’s Budget Seeks $2 Trillion More In Spending And Deficits Than Last Year,”The Heritage Foundation , 2/1/10)

Obama’s FY2012 Budget Was “A Political Document By Someone That Wants To Win Re-Election.” “Obama’s $3.7 trillion budget is an opening bid, as well as a political document by someone who wants to win re-election… Bottom line: Presidential budgets are more political documents than anything else, and this budget is by someone who wants to win re-election.” (NBC News’ ” First Read,” 2/14/11)

• Obama Was “Mostly AWOL” On The “Big Ideological Budget Discussions” In 2011. “They’re also talking about the big, ideological budget discussions that must occur in the future. ‘There are going to be I think very sharply contrasting visions in terms of where we should move the country,’ Obama said. ‘That’s a legitimate debate to have.’ Really? So where has the president been in that debate? Mostly AWOL, so far as I can tell.” (Gloria Borger, Op-Ed, “Washington, We’re Done With High School,” CNN, 4/6/11)