Obama’s Late Night Budget Bluster
5:30 PM, Sep 19, 2012 • By STEPHEN F. HAYES
In an appearance on the Late Show with David Letterman, President Barack Obama suggested that most of the country’s debt was accumulated under George W. Bush, pretended that he has offered a solution to these problems, said that he does not know the total U.S. national debt, and claimed that the debt is not a short-term concern for the country.
It was one of the most dishonest performances from this president in recent memory, and yet it has generated virtually no attention from a mainstream media.
The conversation started when Letterman told the president that he’d watched the Republican National Convention and was taken by the debt clock spinning the convention hall.
This is highly misleading. Letterman asked about the debt clock and Obama responded by talking about annual deficits. The effect, of course, is to allow viewers to conclude that all of the debt on the debt clock was accrued after Clinton – and because of the policies of George W. Bush. Clinton certainly deserves some credit for the surpluses, but the debt when Clinton left office was $5.7 trillion. It’s worth noting that Obama supported one of those two wars, has extended many of those tax cuts, and has proposed to provide health care well beyond the costly prescription drug plan – all without finding ways to pay for it.
There are several problems with this passage. Which programs “don’t work”? And given that he’s been president for nearly four years, why haven’t they been eliminated? The budget presented by the president in 2012 never balances – it never comes close. After his budget proposal was roundly criticized as unserious last winter, Obama took another shot with a big economic speech in June. It didn’t work.
Dana Milbank, the acerbic liberal columnist for the Washington Post, wrote on June 14, 2012, under the headline: “Skip the falsehoods, Mr. President, and give us a plan.” Milbank called Obama’s do-over speech “a falsehood wrapped in a fallacy. The falsehood is that he has been serious about cutting government spending. The fallacy is that this election will be some sort of referendum that will break the logjam in Washington.” Obama, Milbank continued, “has made no serious proposal to fix the runaway entitlement programs that threaten to swamp the government’s finances.” Milbank criticized the plans offered by Republicans but acknowledged that they have at least presented one. “Nothing in Obama’s speech came close to a proposal to fix the debt problem.”
Erskine Bowles, a Democrat Obama chose to co-chair his debt commission, had this to say about Obama's proposal: "The President came out with his own plan and the President came out, as you will remember, with a budget and I don’t think anyone took that budget very seriously. Um, the Senate voted against it 97 to nothing."
Not only has the president failed to do anything serious on debt and deficits, comments from his top adviser suggest that it wouldn’t be a priority in his second term. In an interview with National Journal, David Axelrod responded to a claim that Obama has been “vague” about his second term goals. He listed six specific issues. The list did not include anything on the debt or deficits.
If cutting the deficit or reducing the debt were an Obama priority, it’s unlikely that the president’s top adviser would fail to mention it.
Moreover, Obama claims in the Letterman interview, as he has before, that together with his phantom spending cuts, raising taxes on the rich will help us “manage very effectively” and “help get our books in order.”
It will not.
Let’s use the White House’s own numbers. The Office of Management and Budget estimates that allowing Bush tax cuts to expire for those with incomes above $250,000 would generate $835 billion over the next ten years – or $83 billion per year. Adding in hikes in the estate, gift, and GST taxes would bring in another $116 billion. In total, the White House estimates that its tax hikes would bring in an additional $952 billion.
And how much in deficit spending? $6.4 trillion over the same ten years.
Letterman’s question wasn’t precise. Was he talking about the debt as it registered on the debt clock at the Republican convention? Or, picking up on Obama’s answer, when Clinton left office? When Obama came to office? The question was ambiguous, but Obama, rather than clarify, simply chose not to answer it.
Letterman then asks a rather basic question:
The most stunning part of Obama’s answer is his claim that “we don’t have to worry about [debt] in the short term.”
According to the U.S. Treasury, the federal government is adding more than $4 billion in debt each day. The Congressional Budget Office and the Treasury Department estimate that the government is paying nearly $650,000,000 in interest payments every day under President Obama. That’s a lot of short-term damage.
And while the president argues that low interest rates mean debt is not a problem in the short-term, at least one credit agency, Egan-Jones, disagrees. The ratings firm downgraded the US government from “AA” to “AA-“ citing the decision of the Federal Reserve’s open-ended commitment to keep printing money.
There is one other interesting comment from the president in this exchange. A look at his first-term record gives us reason to be skeptical that Obama would address debt and deficits in any serious manner in a second term. So does the list provided by David Axelrod. But if he were to change course, his comments to Letterman raise real questions about how he might do so.
The president told Letterman that as he seeks to deal with debt and deficits in a “balanced way,” he doesn’t “want to balance it solely on the backs of middle class families.” Dealing with the debt, he added, “is going to require a little give on everybody’s part.” (Emphasis added).
What is the "give" from the middle class? Obama's assertion that he doesn't want to seek balance "solely on the backs of the middle class," suggests that he does want to ask something of the middle class. What is it?
The president has long claimed that he would not raise taxes on middle class Americans.
But when the president speaks of “balance” it’s usually a euphemism for higher taxes. So what does he mean when he says that in seeking “balance” he doesn’t want to deal with deficits “solely on the backs of middle class families?” We know that he’s proposing higher taxes on the rich. What is he going to ask middle class families to do?
We know that Obama’s former budget director has called for the expiration of all Bush tax cuts – meaning a de facto tax hike not only the those in higher brackets but on everyone, including the “middle class.”
The New Yorker’s Ryan Lizza reported back in June that this was a real possibility.
“Several White House officials I talked to made it clear that if a deal, or at least the framework for a deal, is not reached before December 31st Obama would allow all the Bush tax cuts to expire – a tactic that would achieve huge deficit reduction, but in a particularly painful and ill-conceived fashion.”
There are dozens of interesting questions of Obama and his campaign for reporters curious enough to ask them.
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