Presidential Double-Talk

To those who believe that Barack Obama is a different kind of politician—more honest, more courageous, more upfront—please don't examine his administration's recent budget. If you do, you may sadly conclude that he resembles presidents stretching back to John F. Kennedy in one crucial respect. He won't tax voters for all the government services they want. That's the main reason we've run budget deficits in 43 of the past 48 years.

Barack Obama is a great pretender. He constantly says he's doing things that he isn't, and he relies on his powerful rhetoric to obscure the difference. He has made "responsibility" a personal theme, and the budget's cover line is "A New Era of Responsibility." He claims that the budget begins "making the tough choices necessary to restore fiscal discipline." It doesn't.

Let's recognize that, with today's depressed economy, big deficits are unavoidable for some years. Let's also assume that Obama wins reelection. By his last year, 2016, the economy will have presumably long recovered. What, then, does his final budget look like? Well, it runs a $637 billion deficit, equal to 3.2 percent of the economy (gross domestic product), projects Obama's Office of Management and Budget. Just for the record, that would roughly match Ronald Reagan's last deficit, 3.1 percent of GDP in 1988, so fiercely criticized by Democrats.

As a society, we should be willing to pay in taxes what it costs government to provide desired services. If benefits don't seem equal to burdens, then the spending isn't worth having (granting exceptions for deficits in wartime and economic slumps).

If Obama were "responsible," he would be leading a candid conversation about government's size and role. Who deserves support and why? How big can government grow before higher taxes and deficits harm long-term economic growth? Although Obama claims to be doing this, he hasn't confronted entitlement psychology—the belief that government benefits once conferred should never be revoked—and asked whether some significant spending no longer serves any "public interest."

Is it in the public interest for the well-off elderly (say, a couple with $125,000 of income) to be subsidized, through Social Security and Medicare, by poorer young and middle-aged workers? Are any farm subsidies justified when farming seems no more insecure than countless other sectors (say, the news media) and subsidies aren't essential for food production? We wouldn't starve without agricultural subsidies.

Given the aging of American society, government faces huge pressures to expand—and intense conflicts between spending on the elderly and spending on everything else. But even before the full force of the baby boom hits (in 2016, only about a quarter of baby boomers will have reached 65), Obama's government will have grown. In 2016, federal spending is projected to be 22.4 percent of GDP, up from 21 percent in 2008; federal taxes, 19.2 percent of GDP, up from 17.7 percent.

It would also be "responsible" for Obama to acknowledge the big gamble in his budget. Defense—a.k.a. national security—has long been government's first job. In Obama's budget, defense spending drops from 20 percent of the total in 2008 to 14 percent in 2016, the smallest share since the 1930s. The decline, reflecting large savings from an Iraq troop drawdown, presumes a much safer world. If the world doesn't cooperate, Obama's deficits would grow.