Do not, as some ungracious pastors do,
Show me the steep and thorny way to heaven;
Whiles, like a puff'd and reckless libertine,
Himself the primrose path of dalliance treads,
And recks not his own rede.
--Hamlet, I, iii, 51-55
Standing before millions of cheering admirers on January 20, the newly christened President Obama decried "our collective failure to make hard choices and prepare the nation for a new age." This idea -- that our nation has suffered because we have punted for too long on difficult decisions -- was a key theme during Obama's campaign, and it has been repeated with the frequency of a corporate ad jingle in the early days of his presidency.
At last month's White House Fiscal Responsibility Summit, Obama declared that, "In the coming years, we'll be forced to make more tough choices, and do much more to address our long-term challenges." He reiterated this point during Tuesday night's primetime press conference.
"What I've said here in Washington is that we've got to make some tough choices," Obama said. "We got to make some tough budgetary choices."
Obama is correct in his diagnosis. The central failure of the Bush era was the belief that we can do everything we want -- cut taxes, expand military and homeland security spending, fight two wars, give prescription drugs to senior citizens, increase federal funding for education and energy -- and do it all without facing any long-term costs. It was a philosophy that was also reflected in Americans who bought houses that they couldn't afford and financial institutions that issued loans on borrowed money at an unsustainable pace.
The $1.3 trillion deficit and the weakened economy that Obama is all too eager to remind us he inherited has been the direct result of a stubborn refusal to accept necessary tradeoffs and face the reality that we can't have everything that we want.
Unfortunately, while he fancies himself a courageous leader, Obama's budget does not reflect hard choices. He is telling the American people that we can spend trillions of dollars on an economic stimulus package, a housing bailout, and multiple financial bailouts without experiencing inflation or requiring broad tax increases. He is insisting that we can save money by providing health care for every American, that we can accomplish this without rationing care, and that the quality of medical treatment will improve. He is promising that we can save money by throwing more federal dollars into energy and that we can increase federal spending on education while cutting taxes on 95 percent of Americans.
The White House has not offered actual numbers to back up Obama's claims about this utopian fiscal future, and the only numbers we do have undercut his points entirely.
Last week, the Congressional Budget Office released an analysis of his budget, and it found that his policies would more than double the public debt to $17.3 trillion by 2019, equal to a staggering 82.4 percent of the economy.
While Obama's budget is named, "A New Era of Responsibility," when questioned about his deficit claims, his first instinct is to point fingers. During Tuesday's press conference, he snapped, "as I recall I'm inheriting a $1.3 trillion deficit." This may be true, but since taking over, Obama has already increased the projected 2009 deficit to $1.8 trillion, according to the CBO. As comedian Jackie Mason quipped recently, "If I inherited a fire, does that mean I have to make the fire bigger and worse?"
Obama also reiterated his claim that he will cut the deficit in half within five years. It's true that according to projections, the deficit will drop during that time period, but this argument is a red herring.
Given that the annual deficit will be jacked up to $1.8 trillion in 2009, cutting it in half within five years is no landmark achievement, because the deficits are expected to shrink naturally assuming the economy recovers. In fact, if we were simply to follow current laws, the CBO estimates that the cumulative deficits for 2010 to 2019 would be $4.4 trillion, or less than half the $9.3 trillion that would result from Obama's budget. Also, while the deficit does decrease in 2011 and 2012, it starts to grow again the following year.
On the campaign trail last June, Obama declared that the Bush administration was "the most fiscally irresponsible administration in history." At the time he made that statement, Bush's record deficit was $413 billion in 2004. Yet according to the CBO, if Obama's budget gets passed, the deficit will never be lower than $658 billion during his time in office should he serve two terms.
During Tuesday's press conference, Obama argued that part of the reason that the CBO's data is worse than the White House projections is that the CBO assumes a lower rate of economic growth. But even looking at the rosier estimates, the Obama administration still projects the public debt exploding from $8.4 trillion in 2009 to $15.4 trillion by 2019.
For all of Obama's talk about the savings generated by his health care proposals (such as computerized medical records and better preventative care), his budget document only claims $316 billion in savings over 10 years. Yet the cost of adopting a health care plan similar to the one he proposed during the campaign is projected at $1.5 trillion over that time period.
Obama said during the press conference that he was very serious about reforming Medicare and Medicaid, but explained that "you're not going to see those savings reflected until much later." He went on to say that "a budget is a snapshot of what we can get done right now, understanding that eight, 10 years from now we will have had a whole series of new budgets -- and we're going to have to make additional adjustments."
In other words, even though every shred of actual data confirms that all the goodies Obama is distributing will lead to unprecedented debt, we're supposed to believe that "adjustments" will be made down the road, and that "savings" are going to kick in at some point in the far off future.
The president is displaying the same type of thinking as Bush did when he pursued policies that caused the record deficits Democrats blasted during the campaign; the same as lenders who sold adjustable rate mortgages that allowed people to buy houses they couldn't afford; and the same as Wall Street bankers who borrowed money to load up on complex financial products backed by those risky mortgages.
Obama isn't making hard choices. He's simply choosing "all of the above."