He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under the first President Bush. He is a graduate of Harvard College and Harvard Law School. He is author of The Obamacare Disaster, from the Heartland Institute, and President Obama's Tax Piracy, and his latest book: America's Ticking Bankruptcy Bomb: How the Looming Debt Crisis Threatens the American Dream-and How We Can Turn the Tide Before It's Too Late.
Latest posts by Peter Ferrara (see all)
- Just As With Reagan, Getting Tax Reform Right Today Is Key To Booming Economy - April 17, 2017
- Closing The Deal With Conservatives On Obamacare - March 24, 2017
- Senator Warren’s ‘Trust The IRS’ Bill - March 21, 2017
Everyone is so sure of their opinion. But almost no one knows anything about it. With most of the news media actually participating in the
partisan political wrangling, instead of reporting on it, can anyone even follow the budget/government spending/CR debate?
Most people don’t know about the big victory over spending the Republicans won in the 2011 Debt Limit battle. Federal spending exploded over Obama’s
first two years in office, 2009 -2010, with an overwhelmingly Democrat Congress more than ready to spend every dime possible. Steve Moore reports in the Wall Street Journal on August 11, “In fiscal 2009 alone, federal spending surged by $600 billion.”
But in November, 2010, the American people replaced the Democrat House majority with a Republican majority to put a stop to that, in one of the most decisive blowouts in the history of Congressional elections. The Republicans gained 63 seats, a New Deal size landslide. And that Republican House majority actually did its job, as discussed below. To this day, that Republican House majority is just about the only check on Obama’s creeping authoritarianism left in America. Certainly, the ne
ws media is no check and balance on Obama.
Actual federal spending peaked in fiscal year 2011 (which started in October, 2010), at $3.6 trillion. In fiscal year 2012, the first year controlled by the new Republican House majority, total federal spending actually declined (which almost never happens) to $3.537 trillion. In fiscal year 2013, which just ended on September 30, total, actual federal spending declined again, by the latest reckoning, to $3.45 trillion. Moore added in the August 11 Journal that this “$150 billion budget decline of 4% is the first time that federal expenditures have fallen for two consecutive years since the end of the Korean War.”
Moore explained how this happened,
“This reversal from the spending binge in 2009 and 2010 began with the debt- ceiling agreement between Mr. Obama and House Speaker John Boehner
in 2011. The agreement set $2 trillion in tight caps on spending over a decade and created this year’s budget sequester, which will save more than $50 billion in fiscal
Note that it is not just the sequester that has achieved these results. It is the $2 trillion in spending caps over a decade that is also holding the line over the longer run.
As Moore further explains the spending victories, “Discretionary spending soared to $1.347 trillion in fiscal 2011, according to the CBO, but then was cut by $62 billion in 2012 and another $72 billion this year….And these are real cuts, not pixie dust reductions off some sham baseline.” As a percent of GDP, federal spending has plummeted from “a post-World War II high of 25.2%” in 2009, to roughly 21.5% by the end of this 2013 fiscal year. (That needs to continue down to 20% at least, and if we are smart politically, to 15%, instead of on track to 30% or 40% of GDP or more, which is where we still are headed over the long run, due to still entirely unreforme
This is why the federal deficit has plummeted as well, “from its Mount Everest peak of 10.2% of gross domestic product in 2009, to about 4% this year,” Moore writes. “That’s a bullish six percentage points less of the GDP in new federal debt each year.” In actual, nominal dollars, the deficit has been slashed by nearly 40% this year alone.
Moore summarized it all this way: “In other words, Mr. Obama has inadvertently chained himself to fiscal restraints that could flatten federal spending for the rest of his presidency.” A letter writer to the Journalchallenged the interpretation that this result was inadvertent by the President. Obama was effectively controlling federal spending after all, the letter writer claimed, and everything is going to be fine by the time he is done.
But what really happened is that Obama overconfidently outsmarted himself. As a Journal editorial explained on September 26, “Mr. Obama proposed the automatic cuts only because he thought Republicans would never be able to live with them, and he now regrets it.” He thought the Republicans would recoil from
the sequester cuts in horror. It came as a huge shock to him that the Republicans went ahead with them at the start of the year after all.
And we know that Obama regrets it because he has been telling us precisely that all year long, calling for the sequester to be repealed and replaced by tax increases, in speech after speech all across the country. The Senate Democrat budget, in fact, proposes precisely that policy, adopted by the Democrat Senate majority.
This is all immediately relevant today, because the question is what will happen to the sequester and the budget caps in the current Continuing Resolution (CR) fight. Obama has already called for replacing the sequester spending cuts with still more tax increases, and has said he will shut down the government if House Republicans do not go along. I bet many of your neighbors who only watch, listen to, or read the Democrat controlled media have never heard that. This is what Rush Limbaugh is talking about with his phrase, “low information voters.” It means disabling dysfunction in our democracy, where millions of voters have no idea what they are voting on.
And so the CR sent back to the House by Harry Reid’s Senate increases spending by $70 billion, reversing the sequester and breaking throu
gh the budget caps. But House Republicans must hold the line on spending victories already won. This is worth a government shutdown to fight over. If Republicans press their case articulately in a unified way even in the Democrat Party controlled media, they will win the public’s support over on the spending issue.
Obama is the President, and so any government shutdown that results is his fault. He has shown no leadership on this fall’s budget, spending and debt trainwrecks, issuing his dictates and pronouncements that he is not negotiating over anything. President Reagan negotiated with the Democrat controlled House all the time, and found common ground on many issues. That was real leadership. But Obama is no Reagan. In fact, Obama is not even the President. In his mind and in his actions, he is the King. And so we are just one Presidential phone call away from martial law and a military presence in the streets.
After much public wrangling, the Republicans have now caught their stride in the CR fight over Obamacare as well. As of this writing, it now appears that the House will send back a CR to the Senate delaying all of Obamacare for one year, with the threat of removing the Congressional exemption from Obamacare illegally
granted by Obama contrary to the express language of the Obamacare law. That one year delay means an additional $35 billion at least in further spending savings. The House Republicans should pocket that as well, and not grant any offsetting spending increases elsewhere.
President Obama has already acted illegally in delaying vast swaths of his own Obamacare law for a year, without any authorization in law. So Boehner should send his CR back to Reid with a cover letter explaining to him that Reid and his Senate majority can either accept the one year delay legalizing what Obama has done, or Reid can schedule floor time for a televised discussion of these illegal maneuvers by Obama vis-à-vis his own law.
The position of the Democrat Party today is that Republican Presidents are not above the law, but Democrat Presidents are! And the position of the Republican Party needs to be that Obama will surely obey the law.
[Originally Posted on Forbes]