Obama’s Spending Cut Claptrap

The next crisis deadline is already upon us.  Over the past 16 months the Obama Administration has borrowed and spent another $2 trillion (in addition to $3.4 trillion in tax revenue) and has once again reached it’s debt ceiling.  The Obama-friendly media continue to repeat the falsehood that the President and the Democrats have already implemented spending cuts.

At his recent press conference President Obama fired his opening salvo in the debt ceiling debate, a combination of gibberish and deception wrapped in words that seemed to be about government accounting.

The old I Love Lucy show used variations on the same gag over and over. Rickey discovers that Lucy bought an expensive new dress and complains that he can’t afford it.  “But,” Lucy protests, “the dress didn’t cost anything!  I paid for it with the money I saved when I bought a new coat on sale.”

Through six years of almost continuous campaigning President Obama has developed a rhetorical formula that wraps Lucy’s reasoning in political buzz words.  The most recent example, his press conference comments on the government’s exploding debt and the looming debt ceiling dispute began with:

We are poised for a good year if we make smart decisions and sound investments, and as long as Washington politics don’t get in the way of America’s progress.

Understanding Obama’s remarks starts with a brief vocabulary primer.

“Investment” is Obama’s word for what the rest of us call government spending.  His goal is more, not less spending.

“Washington politics” is any Congressional resistance to limitless annual deficits and record-shattering rates of growth in government debt.

“America’s progress” is more centralized power in the federal government, more spending and higher taxes.

Obama’s remarks continued:

As I said on the campaign, one component to growing our economy and broadening opportunity for the middle class is shrinking our deficits in a balanced and responsible way.

So far, so good.  Government can’t continue to run trillion dollar deficits forever without causing a financial crisis that will be disastrous to the middle class.  So shrinking government deficits is imperative to maintaining the standard of living of the American middle class.

And for nearly two years now, I’ve been fighting for such a plan — one that would reduce our deficits by $4 trillion over the next decade, which would…make [the debt] manageable so it doesn’t crowd out the investments we need to make in people and education and job training and science and medical research — all the things that help us grow.

The ladies and gentlemen of the White House Press play along and pretend this makes sense.  But In the real world it’s gibberish – nonsense.  He contradicts himself by promising “manageable” debt and more spending on his “investments.”  Obama always offsets words about reducing deficits with words about even more “investments.”  This rhetorical strategy is calibrated to be reassuring to listeners who are concerned about deficits and his progressive base that always wants government to spend and do more.  He then said:

Now, step by step we’ve made progress toward that goal.  Over the past two years, I’ve signed into law about $1.4 trillion in spending cuts.

Decoding this claim starts with understanding two key words in government budgeting:

  • baseline” and,
  • assumptions.”

The baseline is projected spending over the next ten years.  The baseline numbers result from a set of assumptions, starting with the assumption that almost every government department, agency and program will receive an automatic budget increase every year. 

As most people know, in Washington, the term “spending cut” rarely means government will spend less in the future than the present.  It means the 5 or 10 year prediction in the latest forecast from the White House shows a tiny bit smaller increase in spending than the previous forecast.

But Obama’s claim to have already “cut” over a trillion is more deceptive than even the usual Washington game of incremental reductions in the rate of spending growth.  The fine print behind his “cuts” are in his budget line item for “overseas contingency operations,” code for military operations in Iraq and Afghanistan.

The Iraq war ended and all US troops left in 2011. The Afghanistan operation was never as large or expensive as Iraq and reductions in troop strength are underway, with virtually all troops scheduled to pull out by next year. 

Yet, as the table to the right shows the Obama budget, under Overseas Contingency Operations, asserts more than a trillion in “spending cuts” for years 2012 – 2021 from not continuing the Iraq and Afghanistan wars.  This is most of the $1.4 trillion in cuts the President claimed in his press conference.

These fictitious “cuts” result from the White House budget office starting with a baseline assumption that the cost of Iraq and Afghanistan would increase every year through 2021, even though they knew there would be no cost at all after 2014.  Then, they tallied “savings” from recognizing reality that the Iraq operation ended nearly two years ago and Afghanistan will end in 2014.

Thus, the President now reports a “spending cut” of $136 billion in 2021, ten years after the last American soldier left Iraq and six years after the scheduled end of the Afghanistan operation.  If Not spending on a war that has ended qualifies as “cuts” then why not claim even more cuts from ending World War II, Korea and Vietnam wars?

The rest of his claimed $1.4 trillion in “cuts” is based on the assumption that not borrowing a trillion for Iraq and Afghanistan will save billions in interest.

Through repetition in the zombie media Obama plants in the mind of the public the perception that he has already “cut” spending.   But, as the chart above shows, Obama’s most recent budget document shows record-breaking annual increases in total government spending at the same time actual war spending winds down.

The spending increase during Obama’s first term was greater than any previous period since mobilization for the Korean War in the early 1950s.  His own budget calls for an even greater spending increase in his second term.

One more quote from Obama’s press conference:

Two weeks ago, I signed into law more than $600 billion in new revenue, by making sure the wealthiest Americans begin to pay their fair share. 

The revenue estimate is a grand total for ten years.  The number that counts, the amount of additional revenue to be produced this year, probably won’t be more than $50 billion, even if the President’s ten year forecast turns out to be accurate.  But in the same Fiscal Cliff bill that enacted this tax increase is new spending and tax credits for politically connected corporations that will will more than offset the additional revenue.  As a result of the fiscal cliff bill total deficits will go up, not down.

The President does not speak in coherent accounting terms.  His words are not meant to inform.  They are meant to deceive.

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