Obama: Why, we can’t cut spending by 2.3 percent!

Today, the Congressional Budget Office projected this year’s deficit to be $845 billion. It would be the first time during Barack Obama’s presidency that the deficit could be measured with only a 12-digit number. Hooray?

CBO expects higher tax revenues, including the tax increases included in the Jan. 1 deal to avert the so-called fiscal cliff, to contribute $259 billion toward deficit reduction. (Here, I repeat my standard disclaimer that CBO almost always over-estimates the increase in revenues that comes with higher tax rates because it does not even attempt to consider how people will change their behavior to avoid paying higher taxes.)

Yet, also today, Obama said he does not want to see spending cuts of just $85 billion due to the sequester take effect.

For those keeping score at home, the cuts he opposes equal (take your pick):

  • just 2.3 percent of all federal spending this year;
  • just 10.1 percent of even this year’s deficit;
  • a mere $1 for every $3 in deficit reduction due to higher revenues (the bulk of which, according to the CBO report, are related to the fiscal cliff deal) — that is, the reverse of the standard ratio discussed for taxes vs. spending in a deficit deal.

Instead of such paltry cuts, Obama wants smaller cuts, even more tax increases, and yet another punt of the larger deficit issue.

Oh, and he missed yesterday’s deadline for submitting a budget to Congress — the third straight year he’s done so.

And some people wonder why conservatives accuse Obama of not being serious about our deficits and debt.

– By Kyle Wingfield

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179 comments Add your comment

Aesop's Fables and other Lib Economic Theories

February 5th, 2013
2:35 pm

It isn’t really about what obozo wants, it’s about whether the Republicans in Congress have the courage and conviction to do what they were elected to do. But, with me being a realist and all, I see another total cave in coming our way.

Third party, anyone?

Ben

February 5th, 2013
2:49 pm

Let’s hear some more specific cuts there Kyle – it gets much harder to explain what’s getting cut when you’re not speaking in the abstract…

Biff

February 5th, 2013
2:54 pm

The problem seems to be-with tens of billions of dollars flowing out of the economy, (and into the hands of the uberwealthy, where it is not invested-but accumulated), the 2.3 % reduction in actual money, and the attendant velocity it provides, is a real blow. The problem, when you have a family of 5 controlling the equivalent wealth of the lower 100,000,000 Americans, is that those 5 are not content-they will continue “investing” in politicians that will continue to tilt things their way; aided and abetted by those such as this author, who prefer to sweep dirt specks off the track, while ignoring the oncoming train.

Wilton Businessman

February 5th, 2013
2:57 pm

Here’s a 2.3% cut for Ben: No more $42,000 toilet seats.

NeldaDee

February 5th, 2013
2:58 pm

What a load of baloney. 2004 – Republicans: “Woo hoo! We’re in office! SPEND!!!” Democrats: “um, okay but wars cost money……” then 2009 – Republicans: “STOP the spending!” Democrats: *heads spinning*

JDW

February 5th, 2013
2:58 pm

@Kyle…”Obama said he does not want to see spending cuts of just $85 billion due to the sequester take effect.”

Of course neither do Republicans…question is does it come from peoples income and health care or the military?

As for the deadline… :roll: I am sure he is the first…o wait nope

indigo

February 5th, 2013
3:00 pm

“does not want to see spending cuts”

Maybe that’s because the Republicans are dead set on cutting Social Security, Medicare and Medicade and won’t go near any cuts to The Military Industrial Complex.

Spending cuts affecting those who can least afford it and ignoring any cuts to their wealthy corporate sponsors is the Republican way.

BW

February 5th, 2013
3:00 pm

Yep all Obama’s fault…let’s see what the Republican House produces

Aesop's Fables and other Lib Economic Theories

February 5th, 2013
3:01 pm

Immediately return all spending back to the 2008 level.

Next question?

Aesop's Fables and other Lib Economic Theories

February 5th, 2013
3:02 pm

Pardon me, 2006, I forgot about nasty pelosi’s gang.

Whatever

February 5th, 2013
3:02 pm

We will have to pay the piper one day. I love how nobody wants their income, health care, or military cut today but are more than happy to see their kids and grandkids have to suffer for them.

Don’t push this off on your kids and grandkids. Pay up now and show what real leadership is.

Cherokee

February 5th, 2013
3:03 pm

The CBO report is also pretty clear that the debt hysteria – and reductions already in place – are a primary contributor to our economic problems.

http://tpmdc.talkingpointsmemo.com/2013/02/deficit-obsession-has-hurt-the-recovery-cbo.php

I would second the request – which specific cuts would you back that would 1) be supported by the American people, and 2) significantly cut the deficit?

Brad

February 5th, 2013
3:04 pm

If he managed the Budget like Bush and the Republicans who took a 100 Billion dollar increase in the National debt from Fiscal Year 2001 and turned it into a 1.5 Trillion dollar annual deficit the deficit would be 22.5 Trillion in 4 years.

Obama came in, passed the stimulus plan which increased that first year deficit to 1.9 Trillion and added additional spending to the next two years. He stopped the Enron style accounting Bush was doing and stopped using supplemental spending to hide the true size of the deficit. Supplemental spending was around 350 Billion in Fiscal Year 2008 where Bush claimed to have a 450 Billion dollar deficit. (if you add the supplemental spending it was 800 Billion)

Even without hiding the war spending the federal budget has increased only 10% in four years under Obama and now we see 4 years after taking office he’s cut the Federal Deficit by 50% just like he promised.

Federal Spending during the Bush years went from 1.9 Trillion to 3.5 Trillion. It’s only 3.8 Trillion four years later.

I’ll tell you who’s not serious and that’s every damn lying conservative in the country.

barking frog

February 5th, 2013
3:04 pm

Republicans need only stand pat and the cuts will happen.

Cherokee

February 5th, 2013
3:05 pm

And as to submitting a budget, I would recommend that you read your own paper. jamie has a pretty good blog post on that topic….

Thomas Heyward Jr

February 5th, 2013
3:09 pm

Well…………..as per Wingfeild……….no matter what these Washington maniacs spend……..don’t EVEN think of seceding.
.
Don’t even sign a petition wishing to do so.
.
Our great great grand children will just have to buckle up and work harder.
.
lol……………..not.

Jefferson

February 5th, 2013
3:10 pm

Sounds like the GOP could easy defeat him in an election, so what so wrong with the GOP ?

Kyle Wingfield

February 5th, 2013
3:13 pm

Ben @ 2:49: The White House has already outlined how the $85B in cuts would be made. I’m not the one advocating against them.

Finn McCool (The System isn't Broken; It's Fixed)

February 5th, 2013
3:19 pm

Kyle, have you checked lately to see how that austerity is working out in Europe?

It appears to be an utter failure.

CC

February 5th, 2013
3:19 pm

One more time . . .

Neither and individual nor a nation can either borrow itself way out of debt or spend itself wealthy.

To continue to borrow and spend only prolongs the inevitable and make the inevitable worse in its coming. Liberals apparently are not intelligent enough to realize these obvious basic truths.

Hussein is on track and ahead of schedule to accomplish his purpose thanks to the unintelligent, uninformed and terminally liberal.

Jefferson

February 5th, 2013
3:20 pm

We didn’t have a spending problem, until we started cutting revenue…

Kyle Wingfield

February 5th, 2013
3:21 pm

Wow. Hard to tell whether Biff @ 2:54 or Brad @ 3:04 has the lesser grasp of the facts today.

Biff: Which “family of 5,” exactly, has as much wealth as 100M Americans?

Brad: The $450B figure for FY08 is not a budgeting gimmick Bush made up to cover for a lot of other spending. It represents the deficit between all money actually collected by the federal government and all money actually spent — regardless of whether it was in the budget, a supplemental or anything else. See here. And the talk about “hiding” the war spending outside the budget before, but not now, is all the more rich given that the Senate has not passed a budget at all in almost four years now. By your standard, all the spending is hidden now!

CC

February 5th, 2013
3:22 pm

“Neither and individual” should read “Neither an individual”.

Sorry for the typo . . .

matt

February 5th, 2013
3:23 pm

Why can’t all of you see that politicians are not out to help the American people. They are agenda pushing, “you scratch my back and I’ll scratch yours”, power hungry, dishonest people. It does not matter who is in the House who is in the Senate, who is in the White House. They are all liars. When you vote, you are not voting for the best candidate, you are voting for the guy who is going to screw you the least.

CNN is biased, Fox is biased, there are two sides to every story and depending on which of those you watch will depend on which side of the story you get. Face it, politcians, no matter which party will ruin this country. If not in your lifetime, then in mine, and if not in mine then in my kids. It’s just a matter of time.

Save your “the guy I voted for is awesome” argument. You won’t find a more scandalous bunch of liars anywhere than in politics.

Kyle Wingfield

February 5th, 2013
3:24 pm

Finn @ 3:19: As I’ve explained before, the vast majority of the “austerity” in Europe is tax increases. And you’re right, those have been an utter failure.

Stevie Ray...Clowns to my Left and Jokers to my Right here I am....

February 5th, 2013
3:27 pm

KYLE

I have been pressing this question on Jay’s blog time and time again with zero credible reactions…Politics of following the money if guess. The fact that BO has exhibited poor, if non-existent leadership skills it the root. Why would we expect him to make any decisions that didn’t represent small ball(s) politics?

He cares not about borrowing, spending etectera as long as the DEMs don’t upset any aspect of cash sources. They see the medicine the GOP is getting and are a couple of courageous decisions away from being in same state…

At this rate, BO will definitely go down as worst fiscal Potus in history. He will just go down possibly as better that Bush…what a great legacy that will wrought eh?

Del

February 5th, 2013
3:30 pm

The campaigner-n-chief became the propagandist-n-chief this afternoon. Sadly at least for now we have about 53% of the electorate who either believe this snake oil peddler or are so ideologically brainwashed they don’t care if he’s a liar.

Stevie Ray...Clowns to my Left and Jokers to my Right here I am....

February 5th, 2013
3:30 pm

KYLE

The expected 2013 deficit reduction estimate rests on perilously thin ground. CBO has been anything but accurate in terms of growth estimates. Second, this assumes that congress spending will not exceed (rule v norm)the allocated funds..

At least BO is setting a fine precedent for future presidents..no budget submission, no worries..

mbtc

February 5th, 2013
3:30 pm

Obama’s trying not to starve the recovery, as well he should. Let those who have benefited the most from this economy sacrifice. End lopholes and deductions on the wealthiest.

MANGLER

February 5th, 2013
3:31 pm

OK, let’s reduce 2.3% of all Federal Spending this year. ALL Federal spending, not just the things the GOP wants to gut, er cut.
Fewer planes and bombs while continuing to bring troops home. If they’re not getting blown up over seas, they’re not requiring medical attention, which you also want to pay less for. Win Win.
Next, eliminate farm subsidies. If a farmer can’t support a lifestyle by farming, then he moves on – free market and all that.
Moving on to energy subsidies. All of them, not just the “green” ones. Companies that record record profits don’t need help to get firm footings in the world of business. If start-ups are valid, private capital will roll in. More of that free market stuff.
Lay off 2.3% (more) of the Federal work force. They’ll make less with unemployment than they would have at salary anyway – and that spells $avings
Just ignore the slowing of the GDP and rising of the unemployment rosters by doing that.

Jefferson

February 5th, 2013
3:31 pm

Again, what is SO wrong with the GOP ? Or great if you must…

Finn McCool (The System isn't Broken; It's Fixed)

February 5th, 2013
3:33 pm

Third party, anyone?

Here, here. I usually like a menage e trois.

mbtc

February 5th, 2013
3:37 pm

“Neither and individual nor a nation can either borrow itself way out of debt or spend itself wealthy.”

Wish the republicans from Reagan to Bush II had known that. A lot of their base got extremely wealthy.

Stevie Ray...Clowns to my Left and Jokers to my Right here I am....

February 5th, 2013
3:37 pm

KYLE

Several good pieces lately about the difficulty economists are having with any real consensus on the near future. Here’s one you probabaly already seen but I rather liked.

http://www.businessweek.com/articles/2012-09-13/face-it-2013-is-gonna-be-a-bummer

Also, there have been no shortage of writings about Japan’s current narcotic of choice..stimulus programs that bear little if any long term fruit…

Jefferson

February 5th, 2013
3:39 pm

You will never think strait, if you are angry all the time.

CC

February 5th, 2013
3:41 pm

Indigo:

“Maybe that’s because the Republicans are dead set on cutting Social Security, Medicare and Medicade and won’t go near any cuts to The Military Industrial Complex.”

You still reading from the dimocrat playbook of yesterday?

Stevie Ray...Clowns to my Left and Jokers to my Right here I am....

February 5th, 2013
3:43 pm

mbtc

February 5th, 2013
3:30 pm

Great there oh economic genius…so we get the “rich” (whatever that means anymore) to now pay 90% or total collections…how much of the problem will that address? Don’t forget the fact that with accepted growth in entitlements and other new spends..Pelosi-Care for example, most if not all of any new revenues are already spoken for…

At some point, all taxpayers are gonna have to pony up something. No country in the world has ever gotten out of this type situation without everyone paying a “fairshare” including the alledged “victims” the middle class.

Centrist

February 5th, 2013
3:43 pm

Dead on about CBO and Democrats purposeful static tax analysis which is ALWAYS very wrong.

Obama’s tax and spending proposal to avoid sequestration is dead on arrival in Congress – like the few past budget proposals he bothered to make. Just like his annual calls to repeal the Bush tax cuts and for taxes to rise on those making more than $250K – his latest proposals will be ignored (except by the liberal media).

Stevie Ray...Clowns to my Left and Jokers to my Right here I am....

February 5th, 2013
3:45 pm

indigo

February 5th, 2013
3:00 pm

None of the cuts to entitlements proposed will have the devastating impact dramatized by the left. I completely agree. Why we can’t simply cut 10-15% out of DoD is mind-boggling. What do we need with all that crap? Maybe if we didn’t have so much killing power, we wouldn’t feel the need to put it to use at the drop of a hat.

Stevie Ray...Clowns to my Left and Jokers to my Right here I am....

February 5th, 2013
3:50 pm

Jefferson

February 5th, 2013
3:31 pm

They like the DEMS are corrupted with campaign and lobbyist cash…unlike the DEMS at this time, the big money is coming from angry and warring factions due to void of leadership..that being said and given the void of leadership in the WH, it’s a wonder the DEMs are not trending toward the same mutiny.

Michael H. Smith

February 5th, 2013
3:53 pm

From a guy who refused to use his own deficit commission’s very sane straightforward approach to a debt reduction plan did we really expect anything different than a refusal to cut spending Kyle ?

From – Tax Policy Center

The Bowles-Simpson “Chairmen’s Mark” Deficit Reduction Plan

Erskine Bowles and Alan Simpson, co-chairs of President Obama’s Deficit Commission, have released a “Chairmen’s Mark,” a broad plan to reduce the federal deficit by cutting spending and raising taxes. The plan includes various options that would impose different changes on the tax side of the fiscal equation. The first option, “The Zero Plan,” would, among other things, pare away most tax expenditures, devote $80 billion annually to reduce the deficit, and use remaining revenue gains to cut tax rates.

The Tax Policy center has analyzed the distributional effects of three variants of the Zero Plan:
1.Eliminate all tax expenditures—for both income and payroll taxes—except the EITC, the child credit, foreign tax credits, and a few less common preferences.
2.Eliminate tax expenditures only for income taxes, not for payroll taxes.
3.Eliminate tax expenditures only for income taxes—not for payroll taxes—but cap and restructure the tax benefits for mortgage interest, employer-sponsored health insurance, and retirement saving instead of eliminating them.

http://www.taxpolicycenter.org/taxtopics/Bowles_Simpson_Brief.cfm

Georgia, The " New Mississippi "

February 5th, 2013
3:57 pm

Kyle , the only thing Americans want from the House GOP is for them to do their jobs. Their job is to propose , write , introduce , debate and vote on legislation. Once they figure out that someone other than Grover Norquist and Fox News will need to support the Bills created , they may be able to do something besides cause problems for working people.

getalife

February 5th, 2013
4:01 pm

The cuts will cause unemployment to rise.

You still don’t get it Kyle.

Did they fix your party yet?

Centrist

February 5th, 2013
4:02 pm

Following posturing proposals to avoid sequestration for the next 3 weeks is a waste of time.

Only proposals made in 3 weeks or after sequestration begins March 1st will have merit under government last minute crisis management policy. The House of Representatives (Speaker Boehner’s) proposals will either be accepted by the President and the Senate, or we will have sequestration. Either way, the media will declare Obama to have “won”.

Michael H. Smith

February 5th, 2013
4:02 pm

And once the democrats figure out that the House GOP will never support spending and tax bills written by the likes of Van Jones and MSNBC then they may be able do something besides cause problems for the good of the country and all concerned.

getalife

February 5th, 2013
4:06 pm

The gop establishment is winning cons.

You have to fight back.

The libs did.

No more dlc.

Kyle Wingfield

February 5th, 2013
4:07 pm

Spending as a percentage of GDP is at the highest sustained level in 70 years. Unemployment is at the highest sustained level in 70 years.

You still don’t get it getalife.

Tealiban Party

February 5th, 2013
4:08 pm

Kyle Wingfield
February 5th, 2013
3:24 pm
Finn @ 3:19: As I’ve explained before, the vast majority of the “austerity” in Europe is tax increases. And you’re right, those have been an utter failure.

In the UK, for their 2012 budget, the top tax rate was cut 5% and they let the threshold for the personal income tax allowance rise. Of course this is in addition to the largest cuts since WWII. Why is their economy sputtering Kyle? Tax cuts cure all I thought….

getalife

February 5th, 2013
4:10 pm

Spending has dropped and unemployment is dropping .

Get out of the way of free commerce Kyle.

Michael H. Smith

February 5th, 2013
4:12 pm

Yeah “never let a crisis go to waste” said Rahm Emanuel.

The media declaring dear leader Obama the winner is about credible as asking Michelle Obama who lost! :lol: