Obama’s Erie County Budget

16 Feb

In ground breaking news, WNY’s politicians are not the only one’s incapable of tackling large budgetary issues. We have all grown exasperated watching Erie County argue over a hyper-politicized 6% of the budget, and a couple hundred thousand dollars worth of arts spending. Unfortunately, President Obama’s latest gambit bears more than a passing resemblance to Chris Collins’s budget in one very important way – it addresses only the tiniest portion of the issue.

At least Erie County partially has an excuse, as 94% of their budget is federally mandated. President Obama has no such legal excuse, only political ones. The nation is calling for the federal deficit to be lowered. Polls show Americans don’t like how Obama is handling the budget. Even I can add two and two and realize Obama (cynically) should be more aggressive in deficit cutting. And yet his budget only addresses non-defense discretionary spending, or 10% – 15% of the $3.7 Trillion behemoth.

When you only pay attention to the smallest part of the budget, you can’t expect to make a big impact on the deficit. And Obama’s doesn’t. It cuts $1.1 Trillion over 10 years, with the largest chunk ($550 Billion) disappearing in 2012, largely through a rose-colored glasses assumption that tax revenues will rise. But deferred success is no success in Washington’s spending frenzy. Budget projections rarely become reality, as the following charts show.

The chart on the left was produced during FY 2009, after President Obama proposed his $900 Billion stimulus package (which ended up accounting for 65% of the deficit by itself); the chart on the right was produced one year later. A couple items of note.

First, these charts easily explain why Americans (generally, but mostly attributed to the electorally successful Tea Party) are concerned about deficits now when they weren’t 2 years ago. I’ll give you a hint – it’s not because the President is a black Muslim sleeper agent. The deficit lines used to be little, and now are really big. Over four times as big. Clinton earned us a surplus. Bush squandered it and created (at the time) record deficits. Obama has blown either set of deficits or surpluses out of the water with completely out of proportion shortfalls. 

Second, the projections are often significantly off from reality. In FY09, the White House projected a deficit of $1.75T, but fortunately we only ended up with a $1.4T shortfall. So far so good, but Obama’s hole is so deep that his $350B error was larger than 5 of Bush’s 8 total budget deficits. In 2009, they predicted a FY10 deficit of $1.2T, and in 2010, they upped it to $1.5T. In the end, it was $1.3Tish. What’s a $100B or two between friends? It’s worse for FY11, where the deficit was projected to be $850B and $1.4T in 2009 and 2010 respectively. Now its slated to actually be $1.65T. An $800B swing in two years, or roughly double the deficit total of any Bush year. What good is it to claim savings in 2012 when the projections swing so far, and lately, for the worse.

But, you say, these projections have a better chance of coming true, because Obama has already proposed his 2012 budget early! Yes, and he never got a 2011 budget passed at all – we’re still spending on 2010 continuing resolutions. There is much time between now and October 2012, the end of that fiscal year, and much time for Congress and the President to make mischief.

If the President wants to be serious about deficits, and thinks they matter (not all do – Cheney and Krugman being strange bedfellows), then he should address Social Security, Medicare, the Department of Defense, and discretionary spending, and move the budget pain up to this year, and each year after. Republicans have proposed (a few) ways to do this. John Boehner’s numbers may be off (its 107,000 workers hired in the last 2 years, not 200,000), but one has to wonder how all the federal bureaucratic work got done in the Dark Ages of 2009? How did the government function before, when it didn’t have all these indispensable functionaries and laborers? Likewise, Rep Jordan of Ohio (with Jim DeMint in the Senate) have proposed reducing the federal budget to 2006 levels, and keeping it there for a decade. I don’t think we need to freeze spending quite so long, but was 2006 so bad? Did the nation get defended, entitlement checks get paid, and policies implemented? We even added $250 Billion to the deficit that year, so with tax revenues down we may well still be digging a hole. I don’t remember 2006 as the darkest of American days – in fact, with no war in Iraq, I’m sure Obama could put that 2006 money (so to speak) to better use. Or, to put it another way, are our children twice as educated as 2001? Because spending has doubled. Spending and deficits have grown so fast, its hard to imagine there is no room to trim, discretionary, defense, or not.

9 Responses to “Obama’s Erie County Budget”

  1. Brian February 16, 2011 at 6:16 am #

    Taxes gotta go up, especially on the wealthy, if we are to maintain our society at its current standards.  If the wealthy object, don’t put out their fires, maintain their roads, protect their premises, etc., with taxpayer funded police, fire, etc.  If they like their standard of living, they should pay for it, ESPECIALLY as the wealthy use taxpayer services MUCH MORE than the rest of us.  Nobody has to plow the roads around my 200,000 square foot property on five acres of land.

  2. STEEL February 16, 2011 at 1:44 pm #

    The blame Obama for the massive deficit meme is getting a bit old. What do you expect the result to be when you are handed a near depression with drastically reduced revenues? More that a third of Obama’s horrible horrible stimulus was in the form of tax cuts. Something included to appease the right wing. The Republicans just a few months ago forced an additional $700 billion in tax cuts onto the deficit. In their first weeks in office republicans voted to end health care reform a move that the non partisan congressional budget office says will increase the deficit. I can’t wait to hear the Teapublican budget. I am sure that it is going to be very tough on the Military industrialists and old folks NAAAAAHHHHHHT!

    Not defending Obama’s approach but give me a break with the ignorant blame Obama for the deficit idiocy.

  3. Leo Wilson February 16, 2011 at 2:27 pm #

    Taxes don’t have to go up. What has to happen is that the federal government needs to find a revenue source that isn’t my pocket.

    My suspicion is that the federal government isn’t willing to address its core problem – deficit spending. And, when you consider that it has been looting the retirement fund since Medicare was created and owes that retirement fund what has been looted, the deficit is actually about 3 times what people talk about in the media.

    What needs to happen isn’t to penalize the citizenry (even the RICH citizenry) for foolish leadership. What the real need is to reign in the actions of politicians with laws that limit their ability to spend what isn’t there already.

  4. Brian Castner February 16, 2011 at 5:49 pm #

    Dave, I don’t make the rules, but the rules say the President gets the credit or the blame for the budget while he is in office, whether it was all his fault ot not. Reagan gets hit for massive deficits, but I don’t hear much about it being Tip O’Neil or a Dem Congresses fault. Likewise, Gingrich and the Republican Congress don’t seem to get much credit for Clinton’s surpluses. Nancy Pelosi’s deficit’s were $150B, $500B, $1.4T and $1.3T. Does that sound right? We dump it all on the President – complain to the meme police.

    In any case, this article is mostly about that lack of imagination and leadership for 2011 and 2012 – any comments on that?

  5. STEEL February 16, 2011 at 10:43 pm #

    None of them were handed a massive almost depression to climb out of. Let’s stop pretending that  that was a none event. Oh and the Repubs in the Reagan era took credit for everything except the defict.

  6. peteherr February 17, 2011 at 11:13 am #

    Here’s the thing about the budget. The GOP has been uncooperative since Obama’s election. I’m Obama, I do the same thing. I put out a budget that makes some cuts and then let the GOP put their money where their mouths are. Let them tackle the real budget issues. Let them go after Social Security, Medicaid/Medicare, and Defense spending. It won’t be popular, and it will have repercussions in November 2012.

    The GOP tax cut extension for the ultra wealthy added almost a trillion to the deficit, in what is a very unstimulative program. The GOP is out to slash spending, which absolutely will kill jobs. Boehner said he doesn’t care about that. So, I like Obama’s strategy. Let the GOP put up or shut up. So, the “wher are the jobs” we have to cut the deficit GOP party, really doesn’t care about either of those things all that much.

  7. STEEL February 17, 2011 at 11:28 am #

    I see Mr. Boehner showed just how intent he is on cutting spending with his recent non vote on a major cut that would have hit his own constituency. Nice.

  8. Brian Castner February 17, 2011 at 5:28 pm #

    @ Pete and STEEL – its the oldest point ever, but that doesn’t make it untrue: it takes two to tango. Obama signed the tax cut for the rich (super and otherwise), so its on him the same. If he doesn’t want it, veto the bill. Likewise, Obama was handed a near-depression, but that doesn’t mean he needed a stimulus of that size or composition, or even one at all. If he wants to take credit for any success it has had (we need a serious discussion on whether $900B in debt was worth a 10% unemployment rate instead of 12%), then he needs to take the blame for the deficit it incurs as well.

  9. STEEL February 18, 2011 at 3:51 pm #

    My point is lets have some refreshing honesty in discussing the issue rather than teabagging demagoguery. Obama’s 700B stimulus (almost 1/2 of which is tax cuts) is credited by most credible economists with kick starting a declining ecomomy. Those economists aslo say it was too small. The stimulus was on top of drastically reduced revenue caused. Laying this on Obama is dishonest. That was on top of the Auto bail out which saved an entire American industry – perhaps instead of laying that part of the deficit ob Obama it should be placed on the right wing rulers of private capital who cause the auto industry to collapse. This deficit spending was on top of the Bank bail out which was not enacted by Obama but by right wing hero Bush. This was on top of other deficit spending already approved by the Bush administration before Obama was even elected. So sure Obama was in charge but lets dispense with the hyperbolic breathless complaining about how Obama can’t control his urge to spend.

    Brian you are talking out of both sides of your mouth. Based on your comment you cannot claim by any measure that Republicans are eager to lower the deficit. They never have been for reduced spending or reduced government and never will be. The biggest benefactors of federal deficit spending are mostly red states. A majority of states getting more federal money than they put in are red states.

    Sure Obama is in charge but let’s have a real conversation here. Obama is not going to be in first place after the first lap if he is given the last pole position in the race. That fact that he inherited that poor pole position from Bush has to be taken into consideration before poring on the Palinist rhetoric.

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