Decoding Obama’s Budget: A sketch of President Obama’s new budget proposal shows a modest amount of deficit reduction
Photo: President Barack Obama speaks at the Police Academy in Denver last Wednesday. Susan Walsh/AP/File
Two Parties, One Sequester: The latest from DC Decoder, as the $85 billion deadline looms.
Photo: Rep. James Lankford of Oklahoma (far l.) was one of the Republicans who met with reporters on Capitol Hill Tuesday to challenge President Obama and the Senate to avoid the ‘sequester.’ Photo by: J. Scott Applewhite/AP
Pew Research Center on Sequestration: ”A new national survey by the Pew Research Center and The Washington Post, conducted Feb. 21-24 among 1,000 adults, finds that most say the budget sequester would have a major effect on the economy as well as on the US military.”
A flag flies above the capitol building the day before President Obama’s Presidential Inauguration on January 20, in Washington D.C. Photo by: Ann Hermes/The Christian Science Monitor
Debt Decoder: Congress has reached a temporary deal to extend the debt ceiling, but what’s really happening with the US economy, and more importantly jobs? Decoder answers three important questions.
Suggested by DC Decoder follower David McClurkin
USAGE: “I’m not for kicking the can down the road,” the majority leader said. “I think we’ve done that too much…” –The Christian Science Monitor, Nov. 7
DC DECODER DEFINITION: Most simply, the phrase “kicking the can,” means procrastinating. But according to the Wall Street Journal, it’s become,
“The de rigueur shorthand for describing how central banks and legislators around the world are handling the credit crisis: applying quick cosmetic fixes that delay the inevitable pain of writing down unsustainable debts.”
The Journal writes that the phrase came to popularity in the 1980s. However, the game “kick the can,” and its evocations of rural summer afternoons whiled away by kicking around a rusty can, are long-held images in the collective American memory.
Recently, the phrase has often been employed to describe Congress’ inability, thus far, to act on the fiscal cliff, or the need to reduce the country’s deficit.
Congress gave the can a big kick down the road in 2011, when the bipartisan “Supercommittee” could not agree a combination of spending cuts and tax increases totaling $1.2 trillion over 10 years.
Instead, the end-of-2012 deadline went into effect, which means Congress must reach a compromise or face $7 trillion in automatic tax increases and spending cuts to both defense-related and domestic programs.
See other terms in DC Decoder’s glossary of political vocabulary, jargon, and clichés.
Want something decoded? Leave a comment or Tweet @DC_Decoder!
President Barack Obama’s supporters hold up small US flags as they celebrate at an election night victory party at McCormick Place, on November 6, in Chicago, Illinois. Obama beat Republican candidate and former Massachusetts governor Mitt Romney to get re-elected for four more years. Photo by Melanie Stetson Freeman/The Christian Science Monitor
You Asked, We Decoded: DC Decoder’s Best Work on the Fiscal Cliff
Post-election, the GOP-led House still sees its mandate as tax-hike prevention. Obama and the Democrats still want to raise taxes for the wealthy. But if they don’t work together, the looming ‘fiscal cliff’ – which no one wants to see – may doom them all.
The White House has reported on the $1.2 trillion in automatic budget cuts that are part of last year’s debt ceiling deal. But how the cuts will impact individual programs remains unclear.
The Pentagon may finally be planning for dreaded spending cuts set to take effect in the new year, though it is mum on any specifics. It wants Congress to come up with a different solution to US deficit spending.
The story of the 2012 Presidential campaign over the past month has been defined by a mini-resurgence for Barack Obama and the continued difficulties for Mitt Romney and his bid to secure the Republican nomination.
Ryan Lizza uses five charts to illustrate the evolution of the 2012 Presidential election: http://nyr.kr/A7IIpr
President Obama’s fiscal year 2013 budget runs a deficit (meaning expenditures outstrip revenues) by almost $900 billion. Which is interesting, given that President Obama promised in the winter of 2009 - even after the stimulus package and the bailout of the auto industry - to halve the deficit (which was then $1.3 trillion) by the end of his first term. (Editor’s Note: This paragraph has been altered to note the president’s fiscal 2013 budget, rather than his 2012 budget, for accuracy.)
Here’s the president making that pledge.
The key quote:
Today, I’m pledging to cut the deficit we inherited by half by the end of my first term in office. Now this will not be easy, and will require us to make difficult decisions and face challenges we have long neglected.
So did President Obama break his early-term promise? Yes, he did - but why he did is pretty interesting.
First, it’s important to know there are three releases of GDP figures every quarter. An advanced, preliminary, and final release. As the Bureau of Economic Analysis (BEA) gets updated data, they improve on their prior estimates until a final figure is reached. Then, during July of the next year, they often go back and adjust some quarterly figures again just to make sure all the latest information is incorporated.
And then if more data comes out, they’ll keep on revising.
So, back to February of 2009, when the President laid down his deficit-cutting gauntlet. The President and his advisers were working from the advanced GDP report, which said the economy had shrunk by -3.8 percent in the last quarter of 2008. That’s a pretty terrible quarter.
But when the BEA released an update to that GDP figure in its preliminary release on February 27 (just four days after the president had given his promise), Q4 actually looked a lot worse, with a -6.2 percent contraction.
In addition, Obama’s first quarter in office went from a -5.5 percent GDP drop at the time to a revised -6.7 percent decline.
In other words, the President didn’t know exactly how low the economy had gone.
So what? Don’t these things get revised up and down all the time?
That’s true - but according to the BEA’s data, the fourth quarter of 2008 was the second worst quarter in American history, dating back to 1947. The only quarter that was worse was the first quarter of 1958 at -10.4 percent.
What’s more? The first quarter of 2009 was the fourth worst-all time.
So Obama didn’t keep his promise. But it’s fair to say the administration didn’t know what it was getting itself into when it made its fiscal pact.
— by David Grant / @DW_Grant
PHOTO: Republican Policy Committee Chairman John Barrasso (R-WY) holds up a copy of U.S. President Barack Obama’s Fiscal Year 2013 budget with a piece of paper with “Debt on Arrival” written on it at a news conference on Capitol Hill in Washington, February 13, 2012. REUTERS/Larry Downing
Greece has approved a package of reduced government spending to gain additional bailout funds from a troika of European and international groups. That package sparked massive outrage in the streets of Athens as Americans were going to sleep Sunday night.
Public Notice, an advocacy group dedicated to responsible government spending, is rolling out the ad above on national news networks starting Monday morning. It’s part of their “Washington Could Learn A Lot” campaign, which now adds Greece to the likes of Urkel and The Comb Over.
The ad uses language to similar to what many conservative American politicians and activists have employed, particularly at last week’s Conservative Political Action Conference where one unnamed Republican candidate dropped the following line to Slate’s Dave Weigel:
Of course, the fiscal situation in the US and Greece are different by many orders of magnitude - read this somewhat outdated but generally useful write up by CNN on the subject.
UPDATED: Here are a two other thoughts to help you understand the relative size of Greece’s financial wherewithal versus America’s:
However, as your faithful Decoder wrote last week at CPAC, economic issues are receding from the political conversation even among America’s most ardent conservatives.
Which is astounding, given the tall structural - meaning they are baked into America’s current economic/government spending system - problems the US has. Read this outstanding New York Times piece for more on the political issues around America’s biggest spending problems.
So could the US learn from Greece’s austerity plan? Hardly. Could America benefit from a sharper, and longer lasting, focus on financial issues? You bet.
— by David Grant / @DW_Grant
On Feb. 7, 2008, Mitt Romney was in a very different position.
He had competed hard with Arizona Sen. John McCain (R) and captured Nevada, just like he did this year, but came up short in Florida and New Hampshire, both states he won in 2012. He had poured gobs of his own money into the campaign en route to winning 11 states including his native Michigan and the state where he was governor, Massachusetts, but his prospects for capturing the nomination looked dim.
And so on the stage of the Conservative Political Action Conference, one of the nation’s premiere gatherings of top right-leaning talent, he ended his campaign for the presidency.
That speech, which you can read in its entirety here, gives a window into where the country - and the GOP - stood heading into the last presidential election. Here are five moments from Romney’s 2008 speech that are worthy of reappraisal today.
5. “I’m convinced that unless America changes course, we could become the France of the 21st century. Still a great nation, but not the leader of the world, not the superpower. And to me that’s unthinkable.”
The more some things change (as you will see below), the starker the relief in which the things that stay the same appear. Romney’s criticism that President Obama is attempting to turn American into a European-style social welfare state is still a key attack line on the stump and in his prepared speeches today.
4. “Eleven states have given me their nod, compared to [McCain’s] 13. Thank you to those 11. Of course, because size does matter, he’s doing quite a bit better with the number of delegates he’s got.”
That may be the only joke Mitt Romney has landed in four years.
3. Taking a stand on government spending?
Our economy is also burdened by the inexorable ramping up of government spending.
And let’s be careful: Let’s not just focus on the pork alone, even though it is indeed irritating and shameful. Look also at the entitlements. They make up 60 percent of federal spending today. And by the end of the next president’s second term they will total 70 percent.
Any conservative plan for the future has to include entitlement reform that solves the problem, not just acknowledges it.
Romney was spot-on in his assessment of entitlement spending and its role as a serious political issue in the future. However, 2008 Romney perhaps wouldn’t be so impressed with 2012 Romney’s economic plan, which the Wall Street Journal famously called “timid.” They were equally unsparing about his plans for entitlement reform:
On spending, Mr. Romney joins the GOP’s “cut, cap and balance” parade, setting a cap on spending over time at 20% of GDP. What Mr. Romney doesn’t do is provide even a general map for how to get there, beyond cutting spending on nonsecurity domestic programs by 5% upon taking office.
He praises Paul Ryan for making “important strides” on Medicare but says his plan “will differ,” without offering details. He also says there are a “number of options” to reform Social Security without endorsing any of them. We are told those specifics will come later. It’s hardly unusual for candidates to avoid committing to difficult proposals, but it won’t help Mr. Romney contrast his leadership with Mr. Obama’s.
2. To go the distance?
“Even though we face an uphill fight, I know that many in this room are fully behind my campaign.”
AUDIENCE: Mitt! Mitt! Mitt! Mitt!
“You are with me all the way to the convention. Fight on, just like Ronald Reagan did in 1976.”
With Newt Gingrich vowing to take the GOP race all the way to the Republican nominating convention in Tampa and Ron Paul pursuing a strategy of racking up as many convention delegates as possible even if he’s not going to win the nomination outright, this question of whether to persevere or pass to one side continues into the 2012 campaign.
But what all candidates must do is weigh their own chances against the good of the party. Thus, what has changed for Romney - and the nation - is the reason Romney gave for dropping out. For Romney, it was…
1. Terrorism and “radical jihad.”
“Today we are a nation at war. And Barack and Hillary have made their intentions clear regarding Iraq and the war on terror: They would retreat, declare defeat.
And the consequence of that would be devastating. It would mean attacks on America, launched from safe havens that would make Afghanistan under the Taliban look like child’s play. About this, I have no doubt.
Now, I disagree with Senator McCain on a number of issues, as you know.
But I agree with him on doing whatever it takes to be successful in Iraq, and finding and executing Osama bin Laden.
Now, if I fight on, in my campaign, all the way to the convention…I want you to know, I’ve given this a lot of thought — I’d forestall the launch of a national campaign and, frankly, I’d make it easier for Senator Clinton or Obama to win.
Frankly, in this time of war, I simply cannot let my campaign be a part of aiding a surrender to terror.”
My oh my, how the times have changed. In 2008, Romney ended his campaign because he would, as he put it, draw out the GOP race and make it easier for Barack Obama or Hillary Clinton win the White House and subsequently surrender to the terrorists.
Today, of course, the script is completely flipped. After killing Osama bin Laden, extricating the US from Iraq and winding down affairs in Afghanistan, working out a perhaps un-Constitutional but very effective dismantling of Muammar Qaddafi in Libya, using arguably extra-Constitutional measures to kill an Al Qaeda cleric who happened to be an American citizen in Yemen, and, oh, by the way, killing bin Laden, President Obama has some of the toughest foreign policy bona fides around.
To Romney’s points, there have been attempted attacks - from the underwear bomber to package bombs - but none successful as of yet and certainly nothing like a revitalized Taliban a la 2001.
The day after Romney spoke, the Dow closed at around 12,250 and the unemployment rate was, wait for it, 4.9 percent.
Today, the Dow’s back to almost 13,000 - but it took a steep drop well south of 10,000 en route. And unemployment? That’s at 8.3 percent.
In a January survey, a New York Times/CBS poll found that the economy (at 56 percent) was the top factor voters would consider when voting for president. Terrorism didn’t merit a mention, although “something else” and “unsure” together added up to seven percent.
In a sense, this change in focus from foreign policy to the economy makes Romney’s candidacy more viable in 2012 than it was in 2008. Then, foreign policy - and McCain’s long record therein- was at the fore. Today, Romney’s business experience and the economy are at the top of voters minds.
— David Grant / @DW_Grant
PHOTO: Former Massachusetts Gov. Mitt Romney gestures during a speech before the Conservative Political Action Conference, Thursday, Feb. 7, 2008, in Washington, where he announced he was suspending his faltering presidential campaign. (AP Photo/Evan Vucci)