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Obama's first budget: Big spending, big borrowing
An editorial / By Dale McFeatters
Scripps Howard News Service


February 02, 2010
Tuesday AM

President Barack Obama's new budget for the federal fiscal year that starts Oct. 1 underscores how difficult it will be, both economically and politically, to climb out of the financial hole we've dug for ourselves.

When President George W. Bush took office in 2001, he made a conscious decision to spend down an accumulated four-year budget surplus through tax cuts. He did. And in one year the federal government was back debt and, with a Republican-controlled Congress aiding and abetting him, it steadily went deeper and deeper into the red.

jpg Obama and spending

Obama and spending
Eric Allie,
Distributed to subscribers for publication by Cagle Cartoons, Inc.

A Democratic Congress proved no more restrained, and the crushing cost of the recession made it impossible and undesirable to reverse course on spending. The result is that we're looking at three straight years of trillion dollar deficits -- $1.4 trillion last year; the all-time record $1.6 trillion in this current year; and $1.3 trillion next year. Obama's budget calls for the deficit to fall to $828 billion in 2012 and hover in the $700 billion to $800-billion range in the years following. It is surely not what Obama had in mind when he took office.

As long as unemployment is so high -- it is now at 10 percent -- Obama has little room to maneuver. But his economic assumptions see the rate remaining at 10 percent next year before dropping at a rate of about 1 percent a year until it reaches 6.5 percent in 2014, still not good but bearable compared to what we have now.

Thus, Obama is calling on the government to increase spending 3 percent to $3.83 trillion next year, which is actually something like moderation because spending is increasing 5.7 percent this year.

His budget does make some token attempt at deficit reduction, principally in a spending freeze that would save $250 billion over 10 years, but that freeze exempts truly big-ticket items like defense, veterans, homeland security, Social Security and Medicare. And he is proposing to increase education spending by a third.

The president only proposes in his budget; the Congress disposes, and given the state of play in this Congress, enacting the budget promises to be an exceptionally messy process this year. The Republicans, with an eye on the November election, seem determined to block every Obama initiative, even the ones they approve. And the Democrats are likely to have their own reservations, particularly among liberals, about the $192 billion in war-fighting funds he's asking for over the next 18 months.

In principle, Congress is expected to have the budget wrapped up by mid-September. The lawmakers rarely do and this year will not be an exception. The sad reality is that the tough decisions are likely to be pushed into a post-election, lame-duck session in late November or December or even into 2011.



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