- - Monday, March 14, 2016

ANALYSIS/OPINION:

While voters and the media have been focused on presidential nomination dramas in both parties, President Obama released his 2017 budget in early February to little fanfare. That budget proposes an increase in federal expenditures of $2.5 trillion over the next 10 years, and a tax increase of $3.4 trillion over the same period.

Yet, even with those skyrocketing taxes, Mr. Obama’s budget never gets close to balance. Instead, federal spending would soar every year to nearly $6.5 trillion by 2026 (23 percent of gross domestic product, or GDP), the highest spending by any government in world history. That is an increase of 118 percent, more than double, from the $2.98 trillion in federal spending in 2008, the year before Mr. Obama entered office.

Instead of proposing to balance the budget, Mr. Obama’s 2017 budget proposes to return to rising federal deficits every year, reaching trillion-dollar deficits again ($800 billion by 2026). No other president in American history has ever run a deficit of $1 trillion, more than twice the previous all-time record high, even during World War II. But the president ran deficits of over $1 trillion four years in a row, his entire first term.

As a result, under Mr. Obama’s 2017 budget, the Gross Federal Debt would soar to $27.4 trillion by 2026, the highest debt of any government in world history, close to triple the nearly $9.99 trillion the year before he entered office. By the end of his second term in office, Mr. Obama will have added more to the national debt than all prior presidents in American history, from George Washington to George Bush combined.

The Republican Congress should stand firm against Mr. Obama’s proposed soaring increases in federal spending, taxes, deficits and debt. Republicans should follow the lead of House Budget Committee Chairman Tom Price, who has crafted a federal budget that promises to achieve balance within 10 years, with no tax increases, setting America on course to pay off the national debt.

A brief review of how we got in our current deficit-national debt mess is instructive:

• Federal spending as a percent of GDP was remarkably stable at around 20 percent from the end of World War II until 2008. But in Mr. Obama’s first year, 2009, federal spending soared from 20.2 percent of GDP in 2008 to 24.4 percent, an increase of more than one-fifth in the size of the federal government relative to the economy in one year.

• That 2009 spending explosion produced an all-time record deficit of $1.41 trillion, three times the previous highest deficit in American history, and more than six times the highest deficit during the Reagan years.

• The record 2009 deficit was the deliberate policy that Mr. Obama, with his outdated, throwback, Keynesian thinking, thought would be the road to economic recovery. But the nearly $1 trillion “stimulus” bill that year, one of his first legislative acts in office, failed to produce anything except record federal spending, deficits and debt.

• But things began to change with the election of Republican congressional majorities in 2010 and 2014: Spending cuts, enforced by the new Republican House majority, and reduced federal spending (in nominal dollars) two years in a row (2012 and 2013) for the first time in nearly 60 years. Federal spending in 2014 fell to 20.4 percent of GDP, near the long-term 20 percent postwar consensus, reversing the 2009 federal spending explosion, and slashing the deficit to $485 billion.

This restored fiscal discipline was a historic Republican victory on spending, which voters approved by giving Republicans control of the Senate in 2014. While the budget agreement in 2015 provided slightly more in federal discretionary spending, overall discretionary spending under Republican control of Congress is still below what was spent in 2010.

For years, Congress has failed to follow “regular order,” which involves enactment of 12 annual appropriations bills to fund the government, rather than leaving the federal budget on “autopilot” with continuing resolutions or omnibus spending bills. Mr. Price recognizes that his budget can finance needed defense spending, while continuing to reduce federal spending as a share of GDP, by returning to regular order, outlining a conservative vision to balance the budget, and beginning to reform the congressional budget process to eliminate the inherent Washington bias toward more federal spending.

These budget process reforms should not be underestimated for their impact on federal spending, as new requirements that congressional committees must periodically review and reauthorize programs before they can receive annual appropriations could save billions of dollars per year. A January report by the Congressional Budget Office found that lawmakers had appropriated $310 billion in fiscal 2016 — about 25 percent of total discretionary spending — for federal programs whose authorization had expired. Examples of such spending included the Legal Services Corp., the Community Development Fund and the International Trade Administration.

The current fiscal path advocated by Mr. Obama of soaring spending, skyrocketing taxes, and returning to growing budget deficits and ballooning debt is unsustainable, and threatens America with economic peril. Only by committing to balance the federal budget through long-overdue spending restraint, comprehensive tax reform to encourage job creation, and reducing unnecessary and economically destructive government regulations can we restore booming economic growth and faith in the American Dream. Chairman Tom Price and his House Budget Committee colleagues are leading the way, and now is the time for a tidal wave of grass-roots support in their favor.

• Lew Uhler is founder and president of the National Tax Limitation Committee and the National Tax Limitation Foundation. Peter Ferrara is a senior policy adviser for budget and entitlement policy at the foundation, and a senior fellow for budget policy and entitlement reform at the Heartland Institute.


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