Tuesday, 02 August 2011

Obama's Spending Lie on the Debt Deal

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ObamaPresident Obama announced his debt deal with House Speaker John Boehner with a dramatic quote about the intensity of the cuts in the deal:

"The result would be the lowest level of annual domestic spending since Dwight Eisenhower was President — but at a level that still allows us to make job-creating investments in things like education and research."

The problem is that his statement was an outright lie.

Though Obama's statement sounded good, but a White House memo on the deal reveals his words to be false. It reads that the deal

"... reduces Domestic Discretionary Spending to the Lowest Level Since Eisenhower: These discretionary caps will put us on track to reduce non-defense discretionary spending to its lowest level since Dwight Eisenhower was President."

That sounds similar, but non-defense discretionary spending is only one-eighth of total spending. Total federal spending is the highest it's been since World War II, both in real dollar terms and in terms of percentage of gross domestic product.

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And this deficit deal would do nothing to change the perpetual increase in spending. It would pare only $900 billion from the estimated $8 trillion in expected deficits over the next 10 years, and establish a commission to come up with another trillion and a half in cuts on the increases.

Analysts noted that the President failed to mention that he was talking only about non-defense discretionary spending. In what critics say was no accident, he also failed to mention how much the debt limit would be increased by the deal. The American people would be shocked to learn that the deal would increase the national debt limit up $2.4 trillion, on top of the $14.3 trillion the country already has. And that would just last until after the 2012 elections ... perhaps.

The White House admittedly has an impossible task. President Obama is attempting to make his policy of deficit spending forever look like a responsible course. And no one can accomplish such a feat.

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