Morning Bell: Temporary Tax Cuts, Permanent Spending, and “Trillion Dollar Deficits for Years to Come”

Conn Carroll /

One of the biggest challenges President-elect Barack Obama faces in the years to come is how to both enact “swift and bold” changes to public policy while still blaming President Bush for everything that is bad about the economy. Hence Obama’s press conference yesterday where he anesthetized Americans to the likelihood of “trillion dollar deficits for years to come.” Of course, Obama quickly blamed others for the massive shortfall, explaining: “When the American people spoke last November, they were demanding change – change in policies that helped deliver the worst economic crisis that we’ve seen since the Great Depression.“But then Obama completely failed to explain how his administration would rein in these deficits. The New York Times reports:

Mr. Obama declined to say on Tuesday whether the budget that his administration submits to Congress in February would be larger than the $3.1 trillion budget that President Bush submitted for the current fiscal year. He also did not offer any specific examples of how spending could be controlled, saying only that his advisers had been scouring the budget looking for programs that could be eliminated.

Scariest of all, is that Obama’s deficit warnings did not include any of the costs of his own trillion dollar stimulus plan. As we documented yesterday, Obama’s plan does contain some tax cuts, but only temporary cuts that have a proven track record of being completely ineffective at stimulating the economy.

In contrast to his very temporary tax cuts, Obama’s plan has hundreds of billions of dollars in new spending, the majority of which is destined to become permanent increases in federal spending. On Saturday, Obama promised to create 600,000 new government employees. Those salaries and lifetime government funded pensions will be with us forever. His proposed expansion of unemployment insurance to part-time workers will also be a permanent new government expenditure, as will the plan’s proposal to expand Medicaid benefits to out-of-work Americans.

The Democrats in Congress are also eager to include expansion of Medicare eligibility in any stimulus package. And then we haven’t even talked about Obama’s health care plan which will create a government run health care plan much like Medicare that any American can enroll in. Obama’s health care plan will force tens of millions of Americans out of their current coverage and into the government’s one-size-fits-all solution. The cost to taxpayers: $452 billion per year, or more than $6 trillion over a 10-year period.

Rep. Paul Ryan (R-WI) had it right when he told the Wall Street Journal: “Those aren’t stimulus. Those are ideological accomplishments in the guise of economic stimulus.” The left has always wanted to permanently expand the size of the federal government and they know this recession is a great opportunity to accomplish that task. As Obama’s chief of staff Rahm Emanuel recently said, “You never allow a serious crisis to go to waste.”

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