Massive problems if latest debt deal flops

Conservatives won a clear but qualified victory by standing strong for principle and pushing President Barack Obama and Senate Democrats to agree to a spending-cuts-only deal in return for Republicans accepting the biggest-ever single increase in the debt limit.

While raising the federal government’s debt ceiling used to be a mere formality, a landmark precedent has now been established that expanded borrowing authority must be accompanied by spending cuts.

Having said that, let’s not pretend that Washington’s spending addiction has been licked. Unfortunately, Obama is saying exactly that. To hear him tell it, “the result would be the lowest level of annual domestic spending since Dwight Eisenhower was president.”

But according to the Obama White House’s own numbers, the Eisenhower administration spent an inflation-adjusted $327 billion on non-defense spending in its last fiscal year, 1961. This year, the Obama administration will spend over $3.7 trillion — more than 40 percent of which will be borrowed from China and others.

Can such a startling claim be defended? It turns out that in February, Obama said a proposed spending freeze would bring “domestic discretionary spending to its lowest share of our economy since Dwight Eisenhower was president.”

Did you spot the difference? By adding the word “discretionary” to domestic spending, this statement cut the three biggest causes of our annual deficits out of the picture.

The “mandatory” spending programs Medicare and Medicaid didn’t even exist in 1961 and Social Security spending was comparatively negligible at the time. Today, these three programs account for more than 40 percent of all federal spending.

Regardless of why Obama decided to omit the word “discretionary” from his “lowest level of annual domestic spending since Dwight Eisenhower” claim, his statement Sunday night is still highly misleading. At best, the debt limit deal is a Band-Aid being applied to a gushing head wound.

In its first phase, the deal cuts $900 billion in spending over the next decade. The big three entitlement programs will cost over $2 trillion this year alone.

The entire debt deal is supposed to reduce the debt by $2.1 trillion over 10 years. The big three entitlement programs will spend more than $26 trillion during that same time.

Without the debt deal, by 2021 the national debt would still be $18.2 trillion. With the deal, that total only drops to $16.1 trillion.

Finally, the deal creates a “Super Congress” committee of 12 tasked with finding an additional $1.2 trillion in spending cuts.

But Congress already has no less than four standing committees charged with such duty: the House and Senate budget and appropriations committees.

Clearly, Washington still hasn’t learned that mere promises are no solution for our nation’s spending problems. This deal must work as promised or there will be hell to pay in November 2012.

Barack ObamaeditorialsOpinionSan Francisco

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