Who Owns the Deficit?
In the battle for public opinion now underway, Democrats are posing as centrists who favor a "balanced" budget agreement. They have portrayed Republicans, especially Tea Party Republicans, as radicals and "obstructionists," a label the mainstream media has willingly adopted as well. Liberal commentators have been falling all over themselves repeating the president's lie that the GOP is driving the nation toward fiscal Armageddon.
Liberal rhetoric is always pretty otherworldly, but in this case the argument that conservatives are unwilling to compromise is especially outlandish. To accuse someone else of being uncompromising implies one's own willingness to compromise. To accuse another of being an obstructionist suggests one's own intent to move negotiations along -- for example, by offering reasonable suggestions for an agreement. But in the current negotiations, Democrats have refused to cut the federal budget even by 2%.
A 2% cut in the current federal budget would amount to $74 billion annually or $740 billion over 10 years. Neither Obama nor Democratic leaders in Congress have ever agreed to a clean agreement even of that magnitude -- that is, an agreement with immediate spending cuts and no tax increases. Yet the federal budget deficit is running $1.6 trillion (or 10% of GDP), and trillion-dollar deficits are projected to continue throughout the next decade. A 25% reduction in spending is needed to bring the deficit down to a more sustainable level. It is Democrats who are obstructing these cuts.
The plain truth is that Obama refuses to take action to reduce federal spending. The president's FY2012 budget, submitted on February 14, amounted to a $1.5-trillion tax increase over 10 years, according to Americans for Tax Reform. In April the president shifted his position and called for $4 trillion in spending cuts over 12 years, but he has yet to detail where these cuts will come from, and he insists that they be accompanied by tax increases. Since the tax increases would take effect immediately and the cuts would be end-loaded, it seems likely that the cuts would never materialize. Especially since they have never been identified.
The Congressional Budget Office estimates that, given the unwillingness of Democrats to compromise, the national debt will reach 190% of GDP by 2035 (under what CBO calls the "more realistic" Alternative Fiscal Scenario -- not the dreamworks that Democrats present us with). In the absence of budget reform, the CBO projects "spiraling interest payments" pushing debt to "higher and higher levels" in the years ahead. This is the real financial Armageddon facing America, not the one Obama has been using to frighten senior citizens. And about this very real catastrophe, the nation's growing mountain of debt, Democrats refuse to do anything.
Obama, Pelosi, and Reid are like the three little monkeys who pretend to see no evil, hear no evil, and speak no evil. Democrats have largely controlled Washington since 2006, when they took control of Congress, but they have sat there as the national debt has risen from $10 trillion, as it was near the end of the Bush presidency, to $14.5 trillion, as it is today. They have doubled spending, quadrupled the deficit, and raised the national debt by 45%. Now they refuse to cut spending and accuse Republicans of causing the budget crisis with the GOP demand for lower spending.
The fact is that Democrats own the current deficit, and they own the portion of the nation's long-term debt accumulated since they took control of Congress in 2006. Most worrisome is the mounting size of the national debt in relation to GDP. Despite the costly military actions that followed 9/11, the percentage of debt to GDP expanded by only 7.1% during the four years of George W. Bush's first term in office. By comparison, it expanded by 9% during the first fiscal year of Obama's presidency. From just over 60% of GDP in 2006, when Democrats took control of Congress, it will have soared to over 100% by the end of 2011. Conservative projections put the nation's debt at over $20 trillion by 2016. That's an increase of 150% since 2006. With Democrats blocking reform in Congress and with a Democrat in the White House, how can Democrats pretend they are not responsible for the nation's debt crisis?
America is facing a ruinous level of debt, and Democrats are the ones to blame. But so far, the only "solution" Democrats have proposed is to raise taxes. Not just to raise them a little, but to raise them by another 7% of GDP.
Americans for Tax Reform has listed 12 major tax increases in Obama's FY2012 budget proposal. And the president continues to insist he will not sign a budget agreement that does not include many of these same tax increases. In other words, he refuses to budge on the tax increases that he proposed back in February -- in a budget that was rejected by every member of the U.S. Senate, including every Democrat. Who is it that is obstructing the budget process?
Those Democrats who voted against the president's budget still want to raise taxes. Some of them, like Democratic Senator Dick Durbin, want to raise taxes by twice what Obama is proposing. Maybe that's why he refused to support the president's budget.
Democrats are proposing so many new taxes that they would fill another 3,000-page bill. And, just like they did with ObamaCare, they are refusing to negotiate in public. Even if a deal is reached by the end of the month, it will have been arrived at in secret. Congress will not be given an opportunity to debate the agreement, and the public will not be allowed to read it. As Nancy Pelosi likes to say, "we'll have to pass the bill to find out what is in it." It's not likely it will include real cuts, given the Democrats' unwillingness to compromise.
It's time the public understood who the real obstructionists are: not conservatives like Paul Ryan, who would have us live within our means, or at least nearer to our means. It is Democrats who are blocking reform. If not restrained by the American people, they will eventually run up the national debt to 200% of GDP and have us printing trillions upon trillions of worthless currency to pay for it.
Jeffrey Folks is the author of many books and articles on American culture and politics.