A Grim Fiscal Forecast
February 2, 2010 | By Amanda Reinecker
In his State of the Union address last week, President Obama vowed that his administration would enforce a three-year spending freeze to help dig the country out of a "massive fiscal hole." But according to the White House's $3.8 trillion 2011 budget proposal released Monday, freeze or no freeze, that hole is about to get much deeper.
The President's spending freeze would apply to one-eighth of all spending and save a mere $15 billion. But that's just a drop in the bucket. The new budget is "committed to trillions more in spending than taxpayers can afford," points out Heritage Foundation budget policy analyst Brian Riedl. $2 trillion more, to be exact. With all this new spending, the "freeze" will do little to address the record budget deficit projected for fiscal 2010. In fact, the deficit will continue to hover at levels not seen since World War II for the next ten years.
Instead of real solutions, the budget proposal offers more of the same (operative word "more"). As Heritage's Conn Carroll explains, it is "full of billions of dollars in new spending, for failed government programs, higher taxes on American families and businesses, and deficit spending for as far as the eye can see."
These aggressive spending measures would be unaffordable even during good budget times. Rather than attempting to spend its way out of debt, which is an inherently flawed concept, Riedl suggests that the federal government adopt some genuine spending reforms. These would include:
- Taking back leftover funds from TARP and the failed stimulus bill;
- Enacting tough spending caps -- not temporary spending freezes -- to help lawmakers prioritize where money is allocated;
- Disclosing the massive unfunded obligations of Social Security, Medicare, and Medicaid and outline long-term budgets for these programs;
- Reforming entitlement programs, which currently present the greatest domestic challenge our nation faces.
"Currently, the President's budget does nothing to address the nation's serious short-term and long-term fiscal problems -- and indeed makes them worse," writes Riedl. Though not easy, Riedl's proposed reforms would permanently reduce the deficit and present a better alternative to record government and enormous tax increases.
The start of a good 'protect and defend' strategy
Relations between the United States and Iran grew increasingly tense on Monday when the Obama administration adopted a more hard-line stance against the rogue regime and its provocations.
In a return to Bush administration policies, the United States will expand missile defense capabilities in the Persian Gulf by dispatching defensive Patriot missiles to four Persian Gulf states -- Qatar, United Arab Emirates, Bahrain and Kuwait -- and keeping two ships in the Gulf capable of shooting down Iranian missiles. The President has also requested an increase in funding for nuclear weapons research and security programs, signaling a possible hiatus from his nuclear nonproliferation aims.
This defensive shield is an important first step in a "'protect and defend' strategy," that our country very much needs, writes Heritage expert Baker Spring. However, these measures only guard against short-range missiles and may motivate "Iran to focus on threatening the United States directly in order to drive a wedge between the United States and its friends and force the United States out of the region."
President Obama should therefore continue along this "protect and defend" course to ensure that no gaps remain and that our home front is adequately safeguarded against Iran's growing nuclear capabilities. This would require three important steps, Spring argues:
- Upgrade the sea-based missile defense system to make it capable of countering longer-range missiles;
- Restore the larger number of Ground-based Midcourse Defense interceptors that are designed to counter long-range missiles that were proposed by President Bush but scaled back by the Obama administration in 2009;
- Place missile defense interceptors in space, where they can more easily target long-range missiles, as proposed by the Reagan and George H.W. Bush administrations.
These steps, in addition to those the Obama administration recently adopted, would create a missile defense program that will protect Americans from overseas threats. It is encouraging to see that the Obama administration is finally preparing to take more decisive action against Iran's growing hostility.
Heritage brings first principles to college campuses
Last week, Heritage scholar Matthew Spalding visited Emeritus University, a small, left-leaning school in Emporia, KS. The reason for Spalding's visit: to explain the importance of first principles, a core part of Heritage's ten-year Leadership for America campaign.
Prof. Greg Schneider, one of the campus' few conservative professors, has created a new American history course based on Spalding's new book, We Still Hold These Truths, and on The Heritage Guide to the Constitution, edited by Heritage fellow and former Attorney General Ed Meese.
Spalding, whose lecture had to be relocated to a nearby movie theater to accommodate high student turnout, told his audience to stick to their principles -- the principles of the American founding.
This is just the latest example highlighting the national demand for education about the principles of our Founding Fathers. History books all too often provide the facts, but leave out the principles that have allowed our country to flourish. To fill this need, The Heritage Foundation is preparing publicly-available guides to rediscovering our first principles and applying them to get our nation back on course. Stay tuned!
Other Heritage work of note
- In a Saturday address, Mexican President Felipe Calderón cited statistics about economic expansion and export growth from The Index of Economic Freedom, a study co-produced by The Heritage Foundation. "Mexico has moved up several places according to the analysis of the world's specialists and is gaining competitiveness," Calderón said.
- During last Wednesday's State of the Union address, President Obama largely repeated the objectives he laid out during his campaign. One noticeable omission: his promise to push an amnesty bill. "It is wrong to frame immigration reform as a left-right issue and assert that liberals want to solve the problem and conservatives do not," writes Heritage's James Carafano. "The Heritage Foundation, for example, has been a strong proponent of honest and sensible reforms." The amnesty bill may never see the light of day, Carafano argues: "Obama will walk away from amnesty because politically it's a loser for him."
- In a feeble attempt to regain support among younger voters, President Obama has proposed capping student loan payments at 10 percent of the borrower's discretionary income. Like most of the administration's programs, this plan will shift the cost of college and postgraduate education from the borrower onto American taxpayers, according to a Heritage analysis. And since the majority of American citizens do not have post high school education, giving them the responsibility of paying for other people's college educations seems questionable. Heritage expert Dan Lips says there are several more realistic solutions for higher education, including expanded online learning. "An increasing number of higher education institutions are placing course content -- including lectures and instructional materials -- online for free."
- Many Western firms are waking up to the fact that China's government is a repressive communist regime that still glorifies the greatest mass murderer of the 20th century, Mao Zedong. The Chinese government censors the Internet and is known to hack into U.S. and Western computers to steal national security information. "Would President Obama be so ready to kowtow to China if in the middle of Beijing," asks Heritage fellow Lee Edwards, "if there was a mausoleum of Hitler and, hanging from the gate to the Forbidden City, a giant swastika?"
In other news
- The number of government employees will grow to 2.15 million this year, topping two million for the first time since President Clinton declared the "era of big government is over."
- According to a new study, abstinence-focused sexual education classes are more successful in delaying sexual activity.
- A female suicide bomber struck northern Baghdad on Monday, killing at least 54 Iraqi pilgrims and wounding 117.
- The military will shortly begin reviewing its policies on openly gay servicemen. Secretary of Defense Robert Gates has said any decision should not be rushed.
- Virginia's Democratic-controlled state senate voted on Monday to make mandating the purchase of health insurance illegal.
- An early draft of the United States Constitution by one of the final document's framers, James Wilson, was discovered at The Historical Society of Pennsylvania. This is certainly an extraordinary find of a national treasure.
- Famed groundhog Punxsutawney Phil has predicted an additional six weeks of winter. One wonders how global warming alarmists will spin this news.
Coming Up at Heritage
To attend these or any other events at Heritage please RSVP at Heritage's website. Or you can view these events live online. All times are Eastern.
- At Wednesday, February 3 at 11:00 a.m., Senate Minority Leader Mitch McConnell (R-KY) will discuss the Obama administration's policy on terrorism and present the argument that rather than treating terrorists like common criminals, the administration should focus on preventing future terrorist attacks.
Amanda Reinecker is a writer for MyHeritage.org—a website for members and supporters of The Heritage Foundation. Nathaniel Ward, the Editor of MyHeritage.org, and Eva Brates, a Heritage intern, contributed to this report.
