Friday, August 16, 2013

The sequester worked

Stephen Moore writes in the Wall Street Journal the sequester actually worked. Good piece.  Libs and cons will both find it interesting.  Mr. Moore crunches some numbers and reports:

The biggest underreported story out of Washington this year is that the federal budget is shrinking and much more than anyone in either party expected.

Consider the numbers: According to the Congressional Budget Office, annual outlays peaked at $3.598 trillion in fiscal 2011. After President Obama's first two years in office, many in Washington expected that number to hit $4 trillion by 2014. Instead, spending fell to $3.537 trillion in fiscal 2012, and is on pace to fall below $3.45 trillion by the end of this fiscal year (Sept. 30).
The $150 billion budget decline of 4% is the first time federal expenditures have fallen for two consecutive years since the end of the Korean War.

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 2013.

As long as Republicans don't foolishly undo this amazing progress by agreeing to Mr. Obama's demands for a "balanced approach" to the 2014 budget in exchange for calling off the sequester, additional expenditure cuts will continue automatically. Those cuts are built into the current budget law.

In other words, Mr. Obama has inadvertently chained himself to fiscal restraints that could flatten federal spending for the rest of his presidency. If the country sees any normal acceleration of economic growth (from the anemic 1.4% growth rate so far this year), the deficit is on a path to drop steadily at least through 2015. Already the deficit has fallen from its Mount Everest peak of 10.2% of gross domestic product in 2009, to about 4% this year. That's a bullish six percentage points less of the GDP of new federal debt each year.

Admittedly, this fiscal progress follows the gigantic budget blowout that began with the last year of George W. Bush's presidency and the first two years of Mr. Obama's. In fiscal 2009 alone, federal spending surged by $600 billion. That same year, outlays as a share of GDP reached a post-World War II high of 25.2%. But by the end of this fiscal year, outlays as a share of GDP could fall to as low as 21.5%. At least for now, the great Washington spending blitz of the Obama first term is over

Some $80 billion of the outlay savings have come from one-time partial repayments back to the government for the hundreds of billions spent on the bailouts of banks and of Fannie Mae and Freddie Mac. And defense hawks won't be happy that at least half of the fiscal retrenchment has been due to cuts in military spending. The defense budget is on a pace to hit its lowest level (as a share of GDP) since the days of the post-Cold War "peace dividend" during the Clinton years. These deep cutbacks could be dangerous to national security, but as the wars in Afghanistan and Iraq were winding down, defense would have been cut under any scenario. To their credit, at least Speaker Boehner and House Republicans have made sure that the defense drawdown has gone toward deficit reduction—instead of being spent on domestic social-welfare programs, as happened after the Vietnam War.

The sequester cuts in annual budgets for the military, education, transportation and other discretionary programs have also been an underappreciated success, with none of the anticipated negative consequences.

Discretionary spending soared to $1.347 billion in fiscal 2011, according to the CBO, but was then cut by $62 billion in 2012 and another $72 billion this year. That's an impressive 10% shrinkage. And these are real cuts, not pixie-dust reductions off some sham baseline. Discretionary spending as a share of the economy hit 9.4% of GDP in fiscal 2010 but fell to 7.6% this year and is scheduled to slide to 6.4% in Mr. Obama's last year in office.

The sequester is squeezing the very programs liberals care most about—including the National Endowment for the Arts, green-energy subsidies, the Environmental Protection Agency and National Public Radio. Outside Washington, the sequester is forcing a fiscal retrenchment for such liberal special-interest groups as Planned Parenthood and the National Council of La Raza, which have grown dependent on government largess.

But the fiscal story isn't all rosy. The major entitlements remain on autopilot and are roaring toward insolvency. Thanks in large part to Mr. Obama's aversion to practical fixes, the Congressional Budget Office calculates that through July of this year Social Security, Medicare and Medicaid spending are up $73 billion from just last year. This doesn't include ObamaCare, which is scheduled to add $1 trillion of new costs over the next decade.

So the fiscal progress reported here is no excuse for complacency. But it does call into question the wisdom of a government-shutdown confrontation over the budget this fall or a debt-default showdown that runs the risk of suspending the spending caps and sequester and revitalizing an increasingly irrelevant president.

Liberals had hoped that re-electing Mr. Obama, the most pro-spending president since LBJ, would unleash another four years of Great Society government expansion. Instead, spending caps and the sequester are squashing these progressive dreams. Welcome to the new fiscal reality in Washington. All Republicans need to do is enforce the budget laws Mr. Obama has already agreed to. Entitlement reforms will come when liberals realize that the unhappy alternative is to allow every program they cherish to keep shrinking.

18 comments:

Anonymous said...

The biggest reason the budget deficit exploded was for the bail-outs to Wall Street and the banks, under GW Bush, and the unpaid-for war in Iraq along with the knee-jerk reaction to 9/11 and the huge creation of the Homeland Security Department. All of that was charged to the country's credit card. Obama's stimulus added insult to injury, but even most die-hard conservative Republican economists believed it was a necessary jump-start to try and end the great recession. Obama then continued to add insult to injury with unpaid-for spending on bogus green energy projects and spending, and of course, the giant Obamacare giveaway to insurance companies, big pharma, etc. Two worthless Presidents in a row, and the gullible folks voted for each one in the majority twice, with the exception of Bush in 2000 actually losing the national popular vote. I pray 2016 produces better results at the top.

Kingfish said...

BS. There was A LOT of domestic spending under Bush that did not include bailouts.

Anonymous said...

They've been budgeting for the Iraq was since it started.

Anonymous said...

Obama apologists like 10:58 are still blaming Bush. ROFLMAO.

Anonymous said...

I could never vote for the democrap mentality on any level, but I hope to never see another Bush in the white house. The republicrats need to stop the rhetoric, and get off their ass. Hilary seems to be whuppin ass right now, thanks to the right wing media. SAD, SAD, SAD!!!

bill said...

I've never understood how people can believe one Bush is no different than the others. 43 was different from his daddy, and Jeb is different from both of them. George P. is getting started, and he's different from both his uncles and his granddaddy, and even his dad. People are different, and just because they share a bloodline doesn't make them any less fit for a job, especially a job like the President of the United States. Would you rather vote for Hillary? Joe Biden? Michelle Obama? I don't think I'd make up my mind that far in advance...

Anonymous said...

Good article.
I'm glad it's working.
I wish our leadership in both parties were able to do sensible budget cuts where one actually cuts out waste and prioritizes needs. I wish all programs had to justify their continued existence. But apparently rationality and honor are incompatible with politics.

And, people, neither party is without blame. We wouldn't be in this mess if only one party had spent like drunken sailors.

Actually, let me apologize to drunken sailors who at least stop spending when their money runs out!

Anonymous said...

Bush spent a lot of dumb money domestically and was far from conservative, but I'm not on the anti-war band wagon, the rest of the world needs to see periodically that we will stand up for ourselves.

Anonymous said...

Bill @ 11:35, I guess it's in the genetics. A lot of people were fed up with G.W. and George didn't have a good track record either, hence I'm sure Obama erroneously got some of the conservative vote. Then the Pubs gave us McCain; what a Wuz. I thinkin' is McCain, Christie and Obama's love triangle gonna help get Hillary elected?

Another Diversion Trotted Out said...

Meanwhile; Obama announced today that he will once again skirt the congressional process (those wascally Wepubwicans) in order to implement his personal vision of a greener world and turning around global warming.

He trotted out three or four skinny women who look like they walked out of a 60s commune with flowers in their hair....to declare the salvation of the planet. We will have to wait for the executive orders to see what's in them.

Anonymous said...

I see Mr. Kingfish had an initial knee jerk typical Mississippi-never-been-don't-know-nothin-else reaction to my comments at the top. At any rate, my point was that under both Bush and Obama the spending and deficit went crazy out of control. Mr. Kingfish is, however, at least superior in at least paying attention to public and governmental policy and insight into life and culture here in Mississippi as opposed to 99% of the rest of the state's populace, so some credit is due.

Anonymous said...

Mr. Kingfish also gets much credit for being able to withstand incoming attacks from snots like me and rolling with the punches!

That is why I enjoy this website so much, and find much more in common with folks on here than I like to acknowledge...

Anonymous said...

Most incompetent POTUS in our history. Ever. BAR NONE.

Anonymous said...

Are we really expected to believe there are dunces out there like 10:35 aka 2:38 who want us to believe Bush was responsible for the deficit, the unending bailouts and the collapse of the economy? At what point in time does Obama embrace ownership of *his* economy? The fourth year of it? The fifth? The sixth, seventh, eighth? Never?

I realize this is the shit they teach mush-melon-heads at Millsaps and Belhaven, but damn......

Anonymous said...

Just because a Pub doesn't wear an elephant badge, doesn't give them a free pass. Even though the Obamas and Clintons are some of the most bogus people in the world, doesn't mean Bush and the party shouldn't take ownership of their screw ups either. Have you noticed how they're playing in tandem to woo the immigrant vote?

Anonymous said...

um...how quickly we forget the home loans to anyone with a pulse....thanks Bill Clinton.

And remember, Bush tried to reign it in a couple of times. Wouldnt want to be called racists though.

Anonymous said...

It's math. Forget the party. Forget the personalities.

Instead of relying on the talking heads in your party, go look up Congressional spending year by year. Look up the deficit growth year by year.

Make a timeline for the years a Democrat or Republican was in the White House. Beside that, make a timeline for the years Congress was controlled by one party or the other.

Then pull up the historical charts for spending, the deficit, jobs, GDP etc.

This information are all on the Internet provided by the government.

Compare the charts by years.

This isn't that hard. It's not that time consuming since most of you have a printer.

You can then add a chart for tax rates and compare.

The facts are the facts are the facts.

Once you are disabused of some of your dearly held beliefs, pull up the pie charts of where the money was spent in the years you find interesting.

Maybe, then maybe some of you will not be so easily manipulated by your party's " spin" but will actually be informed voters who hold your own party accountable for a change!




Anonymous said...

I see that the Natchez kool-aid drinker arrived to deliver her daily sermon.

Don't look now but Comrade Barry's approval numbers are tanking and no where faster than with those aged 18-29.

Too bad you are so easy manipulated to drink that kool-aid.

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In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.


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If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

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