President Obama working with a “Bite-Size Budget?”


Over the last few years, America has seen federal spending and deficits rise to record levels. Yet headlining a column published by The Wall Street Journal and republished by Yahoo! News is the following: “A President Hungry for Action Has Bite-Size Budget.”

To be fair, this joke of a headline almost totally misrepresents the column itself. But even the column – which makes the case the President doesn’t have much money to work with for his initiatives – has its issues. Here are some of the best and worst points:

In the State of the Union address that essentially presented his program for a second term, Mr. Obama spoke expansively of what government—his government—could do to improve life in America: build and repair infrastructure, spur alternative-energy sources, expand early education, raise pay for workers.

But behind that rhetoric lies a starker reality: The president actually has very little money to spend, so he proposed only limited new funding for these programs his party’s liberal base loves. Spending caps, tax cuts, Republicans in Congress and the giant squeeze of entitlement programs that are sucking funds away from all else—all are tying his hands.

Ignoring the author’s clear bias (government would do better to stop subsidizing energy, for one thing), he is correct that political reality impinges on the President’s larger, more expensive goals. Granted, spending is still not going down, and even the sequestration will leave 97.1% of the spending from 2012 in place. But given the accounting used by Washington, even this sliver of a spending reduction will indeed blunt the President’s expensive aspirations.

Additionally, it’s good the author pointed out how much entitlements take from the federal budget, because this helps outline just how important spending reforms for those programs are.

However, what is the definition of “limited new funding?” The column points out President Obama wants $50 billion in infrastructure spending, and compares it to the several hundred billion President Bush’s Medicare Drug Plan will cost. But while $50 billion is less than 2% of the federal budget, it is a substantial dollar increase when America is already borrowing 30% of what it spends on the federal government.

The author also claims the President is relying on private organizations to facilitate certain aspects of his ideas on infrastructure and green energy because of a lack of existing funding. Yet the wind industry gets billions in annual tax subsidies, so perhaps it’s not a lack of funding so much as a reassessment of where those wasted billions should go. (Ideally, of course, they’d not be spent at all.)

The President also wants to work with states on education programs. Considering states and local communities provide a massive portion of the funding to public schools, this may be less a budgetary issue and more of an issue of working within the existing educational infrastructure.

Towards the end, though, the plain truth comes out:

The deficit remains an enormous problem, of course, but in large measure because Washington can’t get its arms around the health-care costs and benefit programs that are eating up money.

Bingo. President Obama’s plans are limited by Republican opposition in the House, budget deals, and other factors – but mostly by the cost of old programs created by over spenders in generations past. Social Security, Medicare, and Medicaid take up over 40% of the budget, and when you throw in food stamps and other transfer payment programs, well over half the budget is taken up by programs President Obama’s predecessors in the Oval Office created, supported, and/or expanded upon.

“Bite-Size Budget?” Only in Washington is $50 billion-plus considered bite-size.