PRESIDENT OBAMA'S "FISCAL RESPONSIBILITY" CLAIMS DEVOID OF HISTORY OR REALITY

By: Ed Royce
Flashreport.org

January 28, 2010

Last night, the President (as he has done many times before) gave a very energetic speech. Unfortunately, with respect to fiscal responsibility, the rhetoric that came from the President was completely devoid of reality or history.

The performance of this Administration and their Democrat allies in Congress has shown a lack of desire to reign in out of control spending and the deficits that have followed. In 2009 alone, federal expenditures grew roughly 20 percent. As a share of GDP, federal spending was up 4.2 percent above the recent average and now makes up a quarter of our overall economy. Apparently, this trend will continue into the future. For 2010, appropriation bills coming out of Congress continue this spending binge with double digit increases over their 2009 levels.

A highlight in the President's speech was the mention of a three year discretionary spending freeze. While on the surface it sounds like a good idea, it would apply only to 17 percent of the overall budget, and he'll delay its implementation until fiscal year 2012. The President failed to mention that those programs included in the freeze have already seen a 22 percent increase in their annual appropriations over the past two years, in addition to a 25 percent increase included in the stimulus package. None of this reckless spending includes the costs associated with a new healthcare entitlement program that seems to be in parliamentary limbo.

The fact of the matter is we have a fiscal train wreck coming down the tracks. With trillion dollar budget deficits as far as the eye can see, we will soon not be able to convince the rest of the world that we can pay our bills. If the President and Washington Democrats (who have controlled Congress for the last three years) want reality to meet the rhetoric, they would stop the reckless spending immediately. Drop the debate about a $2.5 trillion government takeover of healthcare. Send every dime left from the un-stimulating stimulus and the funds coming back from the bank bailouts toward deficit reduction; nothing else.

Another theme that came from the President's address was the creation of American jobs; certainly a worthy topic considering our double digit unemployment rate. Unfortunately, as with the spending, it appears as though the left hand doesn't know what the extreme left hand is doing. The fact that the Administration's first year was dedicated to reengineering our economy has created a level of uncertainty among Americans unseen in recent history; especially small businesses which are the backbone of our economy.

The attempted takeover of our healthcare sector, energy market, our banks, and auto companies has led to businesses avoiding any unnecessary risk or investment. Take, for instance, the healthcare legislation which passed the House last year. If a small business owner cannot afford to offer his employees healthcare, he can expect to see an 8 percent payroll tax increase. Non-tax related threats, such as the effort to muscle through an elimination of the secret ballot for union elections, also create unnecessary apprehension among businesses. This angst was evident in a recent survey by the National Federation of Independent Businesses, which shows near-term plans for new capital investments remain stuck at a 35-year low. While I welcome some of the efforts the President put forward, any real jobs stimulus should include providing businesses around the country with a modicum of certainty that they will not see a spike in taxes and an increase in operating costs in the coming years.

For all the fanfare, only time will tell whether the President makes good on his new sales pitch that he will now change course and reign in out of control spending and promote growth among businesses. During the speech, I was reminded of a telling statistic I saw earlier in the week. Last Friday our government established its 2,000th federal subsidy program (roughly double the level during the Reagan Administration). That equates to a federal subsidy program for every year that has passed since the glory days of the Roman Empire. This troubling milestone flies in the face of the ideas of limited government and economic freedom; the foundation of our great nation.

Americans don't have to settle for this dependency-laden, big government mentality put forward by those in control of Washington. Now is the time to refocus government on its proper role, restrain out of control spending, eliminate our budget deficits and in so doing shrink the size of the federal government. Now is the time to revive our once strong market-based economy and restore an American character rooted in individual initiative, entrepreneurship and opportunity.