Obama’s $4.147 trillion 2017 fiscal budget proposal won’t even merit a hearing in Congress, but it highlights similarities more than differences with Republicans. Among other things, outsize spending has infuriated grassroots this campaign season, such as after both sides agreed last year to lift sequestration cuts, or, basically, the only cuts.
Obama had already previewed such non-starters as his tax-and-spend green mass transit boondoggle. But big-picture spending is alarming no matter whose numbers we look at.
Under Obama’s proposal, federal spending will stand at $6.15 trillion annually by 2025 (the Congressional Budget Office also projects 2025), with no pretense at balance, ever. But under the “Balanced Budget for a Stronger America” budget proposal and vision document Republicans released last year, the annual budget would still be at least $5 trillion, with a purported balance to barely occur after 10 years and five elections.
For context, it took from the founding to Ronald Reagan to imagine a $1 trillion budget; then things accelerated. Our first two $3 trillion budgets? Both courtesy of George W. Bush.
Under Obama’s plan, we’re going to spend $52 trillion between 2017 and 2026; Over our childrens lifetimes, the word “quadrillion” won’t be a punchline.
But Republicans were going to spend well into the $40 trillions, showing there’s barely any discretionary spending anymore; the autopilot nature of Washington is a feature and bug of both parties.
These are not the Republicans of even the 1990s anymore, somewhat more optimistic ones that promised to get rid of the Department of Energy and the Department of Education, and their ilk, presenting instead a moral and economic agenda for privatization. It was a big contrast to big science, big infrastructure, big “homeland security,” big cybersecurity and looming big compromise with Democrats on so-called Internet neutrality.
While Republicans promised to get rid of Obamacare and candidates promise it every day, you have to keep an eye on them as they are likely to acquiesce to enough features, including keeping “kids” on the parents’ policy until age 26, to derail “repealing every word.” Alas, as time passes, the barriers to the single-payer system some Democrats seek fall while spending rises.
It’s remarkable how big the federal government has become, and how it has been deliberately positioned to grow more and absorb ever more private activity. The heights we saw during the downturn and stimulus days that are back to stay are unfortunately just the beginning.
The deficit for the year that just ended was $438 billion; that’s certainly better than the trillion dollar deficits seen right after the 2008 economic turmoil. But Obama’s budget pops the deficit back over $500 billion and to $660 billion by 2022. The less rosy CBO projects a deficit over $1 trillion by then, and a shocking $1.4 trillion by 2026.
Republicans talk deficit and debt reduction, but it’ll take a staggering amount of cutting to get to surplus.
Worse, interest on the debt as rates rise will send things into a tailspin with more force than anyone wants to talk about. We’d be circling the drain now if rates weren’t zero.
Given all this, growth matters. I am optimistic and still believe we could grow out of much of the problem. But federal red tape and illegitimate economic regulation of the economy (like the aforementioned Internet “net neutrality” and renewable energy subsidy mania) stand in the way.
Federal tentacles extend well beyond the taxes, deficits and borrowing that dominate discussion and campaign rhetoric. Over-regulation costs the economy hundreds of billions in addition to the yearly spending and deficits. Yet in the presidential debates, I recall only hearing Marco Rubio and Jeb Bush make passing references to over-regulation. Ben Carson more energetically pointed out the problems of an annual three-story stack of red tape.
The spending crisis can still be substantially defused by cutting red tape and getting the economy more prolific and healthier. When jobs are abundant, Americans help themselves and their families, and better provide secure retirements and health care for themselves. Not that it’s what I’m looking for, but the federal government collects more revenue.
The Congress (not yet the Senate) has passed important liberalizations like the Regulatory Accountability Act (H.R. 185) and a regulatory repeal commission bill (the SCRUB Act, or H.R. 1155) on overly party-line votes. If a stubborn Obama wishes, let him veto these job expanding reforms, his party can answer for it if they’re made to.
Since we’re in budget season and campaign season besides, a “regulatory budget” is in order. Capping what the federal government spends matters, and capping what the government can force the private sector to spend matters, too. Sen. Marco Rubio (R-Florida) and Sen. Mike Lee (R-Utah) had regulatory budgeting proposals that should be resurrected.
The fiscal budgetary state needs reform that it is simply not going to get in the new Obama budget request. If policymakers assure that no regulation (or agency “guidance document” or “memorandum”) is recognized or effective unless Congress affirms it, they can help make up the difference.
That is, getting control of regulatory overreach at least partly improves prospects for getting spending under control. This administration clearly ignores both. Congress should not.
Originally posted to Forbes.