Comments on Obama Budget for 2012

I have collected a few comments I find worthy of consideration as the citizens of this country ponder the budget for 2012, the debt, and the deficit. 

In Obama's first two years in office, he (and his Congress, of course) increased federal spending by nearly 30 percent over fiscal year 2008 and added $3.5 trillion in new debt.

Erskine Bowles, the Democrat whom Obama appointed as co-chairman of his fiscal commission, said the budget goes "nowhere near where they will have to go to resolve our fiscal nightmare."

The Washington Post and The Atlanta Journal-Constitution, both historically liberal newspapers, say he "punted" on the budget and "kicks the hard choices further down the road" (Post) and the projected deficit "would be larger, in inflation-adjusted dollars, than any deficit between 1940 and 2008" (Journal-Constitution). The proposed spending cuts in the budget are, according to Investors Business Daily, "beyond absurd. The expected deficit this year alone ... is greater than all 'deficit cuts' Obama has in 10 years."


"I don't need to tell you what I think of the budget: It's disastrous," wrote Atlantic economics blogger (and Obama voter) Megan McArdle. "I'm starting to think it's time to panic."

The New Republic's Jonathan ("I hate George W. Bush") Chait headlined his comment, "Why Obama's budget is OK." He thinks it might be a successful political ploy.

In his Tuesday press conference, Obama was reduced to calling for "patience" and saying he wanted to have an "adult conversation" with Republicans on entitlement spending.

Rep. Jim Jordan (R-OH), chairman of a Republican Study Committee made up of economic and socially conservative members, told me over breakfast Tuesday, "the $1.1 trillion savings claim made by the president over 10 years is nothing. This year's deficit is $1.5 trillion."

Obama's budget increases 2012 deficit by a third. This budget produces a $1.1 trillion deficit for 2012. This deficit is 33 percent higher than his 2011 budget projection, which targeted the 2012 deficit at $828 billion. This higher 2012 deficit is equivalent to $3,217 per person in the United States (based on the U.S. Census Bureau's population clock).

“The program (Social Security) is expected to grow from 4.8 percent of GDP today to nearly 6.1 percent in 2030,” a recent CRFB report calculated.

Meanwhile the retirement of the baby boomers means that Medicare enrollment will grow from 47 million to 80 million over the next two decades – creating yet another cost crunch. Currently representing 3.6 percent of GDP, Medicare will consume 5.1 percent of GDP in 2030 according to a recent report published by the Kaiser Family Foundation.

Beyond these twin behemoths is the explosive growth of Medicaid – the state health care system – which saw its ranks swell by more than 6 million during the first two years of the recession. According to a recent survey of state health care directors, Medicaid spending grew by 8.8 percent in 2010 – well above the projected rate of 6.3 percent and the highest rate of growth in eight years.

The Congressional Budget Office estimated earlier this month that interest payments on the national debt alone will consume $5.5 – $6.8 trillion over the coming decade.