Year Three Day 14 Obama Administration Februrary 2, 2011 - History

Year Three Day 14 Obama Administration Februrary 2, 2011 - History

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President Barack Obama at the signing of the START Treaty

9:30AM THE PRESIDENT and THE VICE PRESIDENT receive the Presidential Daily Briefing Oval Office

10:00AM THE PRESIDENT and THE VICE PRESIDENT receive the Economic Daily Briefing Roosevelt Room

11:00AM THE PRESIDENT meets with senior advisors Oval Office

11:35AM THE PRESIDENT signs the New START Treaty Oval Office

2:05PM THE PRESIDENT meets with Senator McCain Oval Office

4:45PM THE PRESIDENT meets with Senator Bingaman Oval Office

3:45PM THE PRESIDENT and THE VICE PRESIDENT meet with Secretary of State Clinton Oval Office

Obama Gives New Press Secretary Awkward Valentine's Day Gift

No wonder the new White House press secretary avoided the press podium today. How would you like to spend your first day on the job defending a disaster like the president's new budget? Not a nice thing to do to a new employee. Not a very Valentine's Day-esque thing, either.

From the blog White House Dossier:

"Newly installed White House Press Secretary Jay Carney spent his first day on the job officially staying away from the White House briefing room.

Carney, who replaces former Press Secretary Robert Gibbs, decided not to speak to the nation today. The decision surprised and disappointed White House reporters, who presumably will have to wait until Tuesday to get a crack at President Obama’s new spokesman.

Carney has never briefed from the podium, and his first appearance will be a high-stakes, high-pressure affair. Not only does he have no experience under the klieg lights, but he has only been in the business of answering reporters’ questions for two years. He was a journalist himself before going to work as Vice President Biden’s spokesman at the start of the administration

Carney’s avoidance of the briefing room carries some peril for President Obama, who is releasing his budget today. Normally on “budget day,” a briefing by the OMB director and possibly other economic aides is followed by an appearance by the press secretary, who is more adept at “spinning” the all-important document and who can also clean up any mistakes made by his wonkish colleagues."

Grand Rants

Obama’s pledge to give Americans five days to review bills on the Web first shrank to 48 hours, which then shrank to 10 hours. Yup. If there’s anyone who has read the entire thing, it’s probably the lobbyists who wrote it.

No lobbyists offering undue influence? Not now.

The constitutionally-questionable move by the Executive Branch to oversee the census is nothing short of scary.

This is ridiculous. Obama and his team make Nixon look like a rookie.

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3 Responses to Obama Administration: Pack of Lies and Power Grabs

You are witnessing the end of the Republican Party. The complete “head in the sand” response of Republicans to the stimulus package will come back to haunt them. When the recover takes place and we remember that Republicans were against it, we will vote them out completely. The next Congress will have a puny Republican minority.

Actually, the opposite will happen. We will vote out all the Democrats because we will remember the Republicans stayed firm and the Democrats led us down the path to Socialism. Read some history, mate.

manupmen: Do your government research before you make these assumptions. Castro promised a better life just like Obama is, and look at how Cuba is doing now. The only way America will recover is if the people in America start taking responsibility for their choices. America was at its best when federal government kept its hands out of our lives. Ask your Senator and Congressman if he pays for welfare and unemployment. Ask them if they are paying for this stimulus package. NO. The working citizens in America, the working class, the people Obama claims to stand for, they are the ones paying for this. So if you have a job, you just paid for someone else who isn’t working to have your money. I bet if you worked hard enough to make a life for yourself, you wouldn’t be crying for the government to tax the rich.

Obama's 2012 budget as much fiction as 2011's

President Barack Obama on Monday introduced his fiscal 2012 budget, a $3.7 trillion amalgamation of guesses and calculations which stands no chance of being enacted in the form the president’s bean counters put it together.

Before it gets back to Obama’s desk for a signature, the spending blueprint will go through no less than 40 congressional committees, 24 subcommittees, countless hearings and a number of floor votes in the House and Senate, CNNMoney’s Jeanne Sahadi writes.

Republicans wasted no time in letting the president know what they liked nothing. Here’s what House Speaker John Boehner said Sunday on NBC’s “Meet the Press”:

"He's going to present a budget tomorrow that's going to continue to destroy jobs by spending too much, borrowing too much, taxing too much."

Considering that all government spending originates in the House, where Boehner’s Republicans hold a 241-to-193 advantage, you can see how big a fight is ahead.

And recent history shows that all this may not mean anything. The federal government still hasn’t passed a budget for fiscal 2011, which began October 1.

The country has been paying its bills with continuing resolutions, the latest of which expires on March 4.

Soundoff (517 Responses)

Obama has increases spending by 24% in just 2 years and that doesn't include the stimulus. Add the stimulus and Obama has increased spending by 80%.

Thank you "Heywood" – I hope "Don" has read your comment. Question is whether it will resonate with any reality to him. Libtards have a brain, just don't know what it is for.

Speaking of intelligence, I'd love to see Obama and Bush sit down and take an I.Q. test. I don't think the results would be surprising.

I really just want to hear possible solutions and how it will work and how long it will take. I don't want to hear from any party what the other guy/women thinks is wrong, tell me why its wrong and what are you going to do to make it right and how.

Democrats want to bankrupt America. It's not enough that we are currently spending 40 cents on every dollar in interest payments alone?

That is incorrect, we are not paying ൰ cents of every dollar" on interest payments. Medicare, Medicaid and Social Security are 40% of the federal Budget, followed by Defense, which is more like 35%. Interest on the National debt is more like 10%. Which is why the cuts proposed by Obama, and the Republicans, are so disingenuous. Real cuts must be made to Social Security, Medicare and Defense in order to have any effect on the deficit. It will never happen, until there is a crisis, ie: the financial world stops buying US Debt because of default risk.

Jose-Feel free to look it up and stop with the about 10%. If you don't know, don't comment. So far this FY (as of 31Jan2011), the Treasury Department spent $169 Billion of your money on interest payments to the holders of the National Debt. Compare that to NASA at $6 Billion, Department of Education at $31 Billion, and Department of Transportation at $26 Billion.

Dems don't want to bankrupt the country anymore than Reps do . oh wait! They both do! Oops!

The party of no ideas just keep rolling along. They are on Ozzies crazy train.

The root cause? Spending more than we have and printing money. Printing vast amounts of money dilutes the value of each and every dollar.

I'd say the root cause is stupidity.

The president is running out of time. He ran out of ideas. heck, I'm not sure he had any good ones to start with.

You are correct printing money will devaluate the dollar to zero. Eventually money will go away. We do not need money. We can then create a moneyless economy.

Whom do you pay the debt? We have printed the money. It is our money. If you could print money and do grocery, buy your things, then you will not have any poverty. You do not have to pay the money back. The same will be true for the government.

You are correct printing money will devaluate the dollar to zero. Eventually money will go away. We do not need money. We can then create a moneyless economy.

The haves and have mores stripped you of every thing. Go ahead and work 12 hour days your whole life. The man will laugh last.

On a par with Mother Goose Nursery rhymes. Thi9s is definitely the book of fiction with no truth what so ever. What we need to do is say if they miss by more than plus or minus ten percent on the deficit prediction they are all fired. Might help get Obama's Fables closer to the truth.

Sure, why not? Would have gotten Bush and his fables out earlier too! That would have been a win-win!

Republicans don't create jobs. They ship them overseas in order to increase their quarterly profit margins and purchase property outside the United States.
The decreased regulations on American businesses is what got us into this mess. There apparently are no courses in Ethics in the standard MBA program. Trickle down economics is total "voodoo", aimed at taking wealth from the lower 50% of the population and giving it to the top 2%. These businessmen need to take a history course and examine what has happened in other societies when the gap between the richest and the majority of citizens gets to be a canyon.

Don't forget about the rampant tax cuts over the last 20-30 years. Of course we can't afford anything anymore we've cut our Federal income so severly.

This article is not news, and the headline's implication is not based on any facts. The "article" also seems to blame the president for proposing a budget that is unlikely to make it intact through a difficult and byzantine budget approval process. This is silly for the following reasons: 1. the president is expected to propose a budget, to belittle him for doing so when it will only be changed is ridiculous. It's the start of the process. 2. This budgeting process has existed long before President Obama, and it is no judgement on the administration that the process seems inefficient. 3. I can't think of a single budget that any president has proposed that has made it through intact. This is the start of a process. 4. I can' think of a single presidential budget that the opposition party has praised.

The "article" seeks to back up its specious claims that the budget proposal is worthless, by quoting the tired old party-line message of the political opposition.

I could go on. In summary, this is not news. It is a maliciously spun blurb devoid of a byline that tries to blame President Obama for the difficult budgeting process and also for his political opposition not liking his proposals. The facts are these: budget processes are difficult, the opposition will always disagree-it's their job, dummy, and sometimes Congress can't even get it's act together to pass a real budget. Did we need to be told this? Did the writer need to pin it on President Obama? No. they just have an agenda, and as far as I can tell, are too cowardly to have a byline.

Obama's 2012 budget as much fiction as 2011's

President Barack Obama on Monday introduced his fiscal 2012 budget, a $3.7 trillion amalgamation of guesses and calculations which stands no chance of being enacted in the form the president’s bean counters put it together.

Before it gets back to Obama’s desk for a signature, the spending blueprint will go through no less than 40 congressional committees, 24 subcommittees, countless hearings and a number of floor votes in the House and Senate, CNNMoney’s Jeanne Sahadi writes.

Republicans wasted no time in letting the president know what they liked nothing. Here’s what House Speaker John Boehner said Sunday on NBC’s “Meet the Press”:

"He's going to present a budget tomorrow that's going to continue to destroy jobs by spending too much, borrowing too much, taxing too much."

Considering that all government spending originates in the House, where Boehner’s Republicans hold a 241-to-193 advantage, you can see how big a fight is ahead.

And recent history shows that all this may not mean anything. The federal government still hasn’t passed a budget for fiscal 2011, which began October 1.

The country has been paying its bills with continuing resolutions, the latest of which expires on March 4.

Soundoff (517 Responses)

To fix social security, just remove or raise the ceiling for payment. That will happen as quickly tort reform, term limits, and some Greek mythology scenarios.

I'd like to point out two things that I haven't really heard here
First – this is a PROPOSED budget. Congress actually sets the budget. Often in the past, Congress hasn't differed from the proposed budget too much, but they are under no obligation to follow any of it.
Second – Our politicians have waited so long that the cust they we really need to make to our spending to make any real impact will have to painfully come from SS, Medicate and the DOD. We will be hard pressed to find a politician from either side is going to champion cutting any of those. Pres Obama knows that serious cuts will never make it past this congress, and that proposing such cuts himself will only make him look bad when congress kills them.

. and in order to make a statement about how serious he is and how he could actually TRY to make things better maybe he should do it anyway. He likes being seen as a different type of president by hanging out with rock bands so this would be something else to put him into the record books if he succeeds.
But he will fail and the middle class will continue to pay out the a$ to support other countries and sacrifice our SS.

It wasn't that long ago that we actually had a surplus of money, or so we heard. Two wars later, and the march toward 'globalization' (meaning more profit for rich), and now we are driving down the wrong road, dems/reps hating each other. If we don't start acting like we are all in the same boat, we won't last long.

Cut taxes to Zero and increase defense spending. THat how you create jobs. Defense spending doesn't cost money. THe Chinese give it to us for free. Libs don't understand Econ 101.

TripleA – the top 1% own the people that would make such decisions, but your idealism is appreciated.

Taxing, domestic spending freeze, cutting domestic programs, all to look as if being tough on those who do not have a say in this country. Why not just cut all foreign handouts. They do not pay taxes to this country, so why should we give them our taxes dollars to help their military, their education, their health care, their economy. It is a shame that our political and business leaders really do not understand who they should represent and the true meaning of being a patriot. America first.

Boehner is right. We should close the gov't and re-instate slavery. It doesn't make sense for wealthy Americans to have to burden this debt. All this debt was created in the last 2 years. THe gov't never had a debt until last year when Obama was putting us in concentration camps.

Looks like banks are going to win again. Interest on student loans before students are out? How does this suppose to foster the inventing our way out of a down economy? One thing is clear about our government. They are there for big business and not the people. The question is how long before the suffering of the common people becomes worthy of our own revolt? Are the Egyptians the only ones with enough spine to do this? No Lobbyist! Term Limits for Congress! No Pay for Congress! No Pay for President! The people don't get a raise and are out of work, so why should the government have it so easy?

Where I live (New Zealand), the government makes Student Loans FREE from interest charges entirely. The people who take out student loans, only have to pay them back via their payroll taxes when they get jobs after University. AKA, when you get your salary each month, the student loan payment comes out of your PAYCHECK so you have to pay it, BUT when you are unemployed by no fault of your own, then no payments are due.

No student loan INTEREST ever accrues because the NZ Govt does not try to RIP OFF it's students by charging it in the first place. The USA Student Loan system is a colossal mess!

I don't get it. Obama wants to cut medicare but he doesn't want to stop paying for the illegals? Really? We pay their housing, food, schooling, healthcare etc. It's costs this country billions every year, but he wants to continue paying for them. What about the families on welfare, generation after generation. How much longer are we going to continue to pay for them when they are cashing in their food stamps for cash to buy drugs. Let us choose where we want out tax money to go. Oh yeah, if he cuts the welfare and illegals who would vote for the Dems?

How about we stop paying for illegals care and house, then offer to pay for a one-way flight back to Mexico?

I am for raising the taxes on the wealthy. Why? Because the wealthy have a lot more to lose than the common man if the economy tanks, if the government cannot do its job and if the system does not protect their wealth. It is because of rules and regulations that the wealthy feel secure and so they have an obligation to pay more.

rich need to pay more, poor need to spend less, republicans need to have a heart for the lesser people among us. democrats need to have balls to fight for cuts to the big 3. were not fighting anybody with fighter jets. our defense is geared towards fighting Soviet era military when we are fighting 13th century primitive guerilla tactics.
and the US will eventually loose its validity among the world but our ego will never let us accept the fact that our great experiment in democracy and capitalism has resulted in a contemporary Roman republic. and we all remember how the Roman republic ended (spending too much trying to fund ventures that had nothing to do with Rome itself. Sound familiar?)

I read that Obama wants to cut funding for lower income people to pay for Winter heating, but yet he's happy to keep the current military spending as is. Oh yeah sure, let's spend billions (trillions) of dollar forcing "Democracy" onto some middle eastern country who hates the US Govt vs. spending a fraction of that on helping needy US Citizens here at home just stay warm in the Winter.

I voted for Obama, but you know his decisions lately (over the last 2 years) raise the question whether he's just another version of G.W. Bush who just gives and gives to the BLACK budget called D.O.D. while at the same time he robs citizens of the USA basic help needs as Winter heating.

Obama – how do you sleep at night?
Obama – why do we have troops in Afghanistan? What's the purpose?
Obama – how much money would the US Govt save if US troops were not in Afghanistan?

Obama – why don't you look into the mirror and see how your actions are ruining this country that G.W. Bush left is such a fragile state of economic & social disarray..

Joe (An American who got sick of all bull**** there and moved overseas for a permanently better life..

Obama's entire economic policy is a series of fantasies and so are those of the Republican's. The Free Trade experiment has been a failure and has wrecked our economy. The solution is 50% across the board trade tariffs and duties on top of those for all consumer good imports, an end to guest worker visas, and taxes on multinational corporation's world wide income. Make economic treason REALLY expensive. Behind trade walls we can grow good jobs. Without those walls we will simply continue to bleed to death, our jobs, our nations wealth, our technological capabilities and manufacturing plants, shipped off to China and India.

It's pretty hard to get wooed or excited by the cuts dictated by a moron.

Obama Budget Raises Taxes On Rich And Big Estates, Sends $250 Checks To Seniors

President Barack Obama rolled out a “new” 2012 budget proposal today, but most of its individual tax provisions are retreads. He again called for letting the Bush tax cuts for couples earning more than $250,000 lapse, this time at the end of 2012, when the two year extension he agreed to in a deal with Congressional Republicans last December, ends. Under Obama’s plan, in 2013 the top rate on ordinary income would rise from 35% to 39.6% while the top rate on dividends and long term capital gains would go from 15% to 20%.

The Administration's budget also again proposes limiting the value of itemized deductions for the better off, raising an estimated $322 billion over ten years. Deductions could only be claimed against a 28% rate, even if a family paid taxes at a 39.6% rate. The provision faces opposition from charities as well as the housing industry, which worries about the impact of making the mortgage interest deduction less valuable. The proposal received a chilly reception, even from Democrats, last year.

Significantly, Obama's new budget proposal calls for returning the estate tax in 2013 to its 2009 state---meaning a $3.5 million estate tax exemption per person, a $1 million per person gift and generation skipping tax exemption and a 45% rate. Obama’s December deal with Republicans raised the estate, gift and GST exemptions to $5 million and lowered the tax rate to 35% for 2011 and 2012. (Any gift tax exemption used reduces the estate tax exemption available. The GST is an extra layer of tax levied on gifts and bequests to grandchildren, if their parents are still alive.)

Obama did, however, provide in his budget for a continuation of the new “portability’’ of the estate tax exemption for couples—a provision that allows any unused exemption of the first spouse to die to be passed on to the survivor. That means, under his proposal, a widow or widower could pass on as much as $7 million to heirs untaxed. The budget also repeats Administration proposals made last year for a crack-down on certain wealth transfer techniques, including short term GRATs and valuation discounts. If Obama and the Republican controlled House don’t reach a deal, in 2013 the estate tax will drop back down to its pre-Bush level, with an exemption of only $1 million and a 55% rate. The estate tax exemption has never fallen before in the history of the levy.

Under Obama’s new proposal, less wealthy taxpayers would keep their Bush income tax cuts, as well as Obama’s $2,500 per student American Opportunity college tax credit for full time undergraduates. But many of them would see their total federal tax bills rise in 2012, since Obama would allow the one-year Social Security payroll tax cut that was part of last December's deal to expire at the end of 2011. He did not call for his signature $400 per person Making Work Pay tax credit, which died at the end of 2010, to be revived.

Obama did, however, throw in (at a cost of nearly $15 billion) a $250 “economic recovery” payment in 2011 for Social Security recipients and other retirees who don't benefit from the payroll tax cut and got such a credit last year. Senior advocates, such as the AARP, have been lobbying for the payments, in part because Social Security recipients received no cost of living increase this year, for the second year in a row. That means, without the $250 payment, the total they receive from the government will shrink.

Obama’s Budget: Small Cuts, Big $1.6 trillion Deficit

President Obama on Monday sent Congress a fiscal 2012 budget calling for $3.73 trillion of spending and predicting a record $1.6 trillion deficit for the current fiscal year. The plan represents a modest, cautious strategy for controlling the long-term debt.

The new deficit forecast for the current fiscal year that ends Sept. 30 is larger than the $1.48 trillion deficit recently projected by the non-partisan Congressional Budget Office, and it further underscores the challenges confronting the Obama administration and a politically divided Congress in containing the long term debt. The White House and the Republican controlled House appear headed for a major confrontation over GOP efforts to cut as much as $100 billion from this year’s budget, and over conservative resistance to raising the $14.3 trillion total ceiling on government borrowing to avert a possible government shutdown and financial crisis this spring.

As promised in his State of the Union address, the president’s budget for the fiscal year that begins Oct. 1st includes a five-year freeze on all discretionary spending outside of defense and national security, and a slowing of growth in the Pentagon budget projected to save $78 billion over the next five years. The budget also outlines proposed cuts in a wide range of popular domestic programs – including low-income energy assistance, community development block grant and Great Lakes cleanup projects – and increases in tax revenues in a bid to trim deficit spending by a total of $1.1 trillion over the coming decade.

Pell grants for low-income college students would be eliminated for summer classes, and graduate students would begin accruing interest immediately upon receiving federal loans, rather than after graduation. These savings would largely offset the rapid increase in student demand for these Pell grant loans.

About two thirds of these overall savings would come from spending cuts and a third from new tax revenues generated in part by eliminating deductions and rescinding tax breaks for high income families making more than $250,000 a year. The budget calls for more than $1.6 trillion in fresh revenue over the next decade, much of it through higher taxes on the wealthy and businesses.

The overall spending of $3.7 trillion called for in Obama’s budget is about a $90 billion less than the estimated spending for the current 2011 fiscal year, or a two-percent reduction.

The president’s budget relies on a fairly optimistic outlook for the economy over the next few years, which if it doesn’t pan out would sharply eat into projected tax collections. The administration expects the economy to grow at a 2.7 percent clip this year, the same as the Congressional Budget Office. But it expects the next decade will average 3.4 percent growth, which is slightly faster than the CBO projection of 3.1 percent average annual growth–but in the middle of private forecasts, according to Austan Goolsbee, the president’s chief economic adviser.

But contrary to the call of Obama’s fiscal commission last December to reduce the deficit by $4 trillion by 2020 through deep spending cuts, elimination of scores of tax loopholes and major entitlement reform, Obama balanced his concern about fiscal discipline with a fresh round of spending on education and research, investments in infrastructure and high-speed wireless data network, and other programs he says are essential to the economic recovery and enhancing the country’s global competitive edge.

“So even as recovery begins to take hold, we have more work to do to live up to our promise by repairing the damage this brutal recession has inflected on our people, generating millions of new jobs, and seizing the economic opportunities of this competitive, new century,” Obama said in his budget message to Congress.

The overall budget plan would reduce the federal deficit as a share of gross domestic product to 3.1 percent by 2015 – slightly higher than the 2.4 percent goal set by the president’s fiscal commission in its report released last fall.

During a speech this morning at the Parkville Middle School and Center of Technology in Baltimore, Obama characterized his proposed spending cuts as simply a “down payment” on reducing the long term debt, but without taking dire action that could derail the recovery from the worst recessions in modern times. “We can’t sacrifice our future in the process,” he said.

The Long Term Deficit
Under Obama’s budget plan, annual deficits through fiscal year 2021 will add a combined $7.2 trillion to the federal debt – including lofty deficits of $1.6 trillion this year and $1.1 trillion in 2012, and lesser deficits of $768 billion in 2013, $645 billion in 2014 and $607 billion in 2015 and $649 billion in 2016. The $1.6 trillion deficit projection for this year is equal to nearly 11 percent of the gross domestic product, making it the biggest gap between spending and revenues since the end of World War II.

The release of the budget, in some ways, marks an opening shot in Obama’s bid for reelection in 2012, in which he is attempting to sharply delineate differences between Democrats and Republicans over spending and deficit issues at a time when unemployment remains high at 9 percent and the economy has not recovered from the recession as quickly as many had hoped.

In a letter to Obama on Sunday, House Speaker John Boehner, R-Ohio, said that “the spending binge in Washington” was hurting the economy, and then added in an interview on NBC’s “Meet the Press” that the U.S. is “broke” and it would be highly dangerous to do nothing to rectify the problem.

But the White House and congressional Democrats argue House Republicans are essentially taking a “meat ax” to important domestic programs that constitute only 16 percent of the overall budget that will undermine the recovery and inflict pain on a lot of Americans without doing much to reduce the deficit. Obama said that while his budget lays offers a path for paying down the deficit, that “Growing the economy and spurring job creation by America’s businesses, large and small, is my top priority.”

A senior administration official said Obama's budget request maps "a sustainable path" that would stabilize government finances in preparation for a broader debate about how to tackle the biggest drivers of future deficits: Social Security and health care for the elderly, as well as a tax code that offers more in breaks and deductions than it collects in revenue, according to the Washington Post.

Despite pleas from members of his own deficit commission and other deficit hawks on Capitol Hill to address the long term structural deficit, the administration concluded there was no political upside to tackling tax and entitlement reform in his budget, giving Republicans and other administration critics an opportunity to go after him without putting down their own proposals for long-term deficit and debt.

Moreover, the administration would pay a huge political price for compromising on Social Security. Liberals and organized labor are already mounting a grass roots campaign to fight changes in eligibility, although they do support increasing the ceiling on wages subject to payroll taxes from the current $106,800 to $180,000, which the administration briefly considered after it was proposed by the fiscal commission.

Alice Rivlin, a member of the fiscal commission and a former Clinton administration budget director who had hoped for major proposals on entitlements and tax reform, said that Obama’s decision to skirt those issues for now was a smart tactical move. “The history of the last two years is that everything the president is for, the Republicans immediately attack and say they’re against–the clearest example being health care reform,” she said. “So if you’re working in that atmosphere, I think you have to figure out how am I going to get bipartisan cover.“

Rivlin noted that while the president is under attack in the House, the Senate affords Obama a good opportunity to work with Democrats and Republicans to forge a bipartisan strategy for controlling long term spending for Social Security, Medicare and Medicaid. “That’s the chance for having some bipartisan covering, so he’s not taking the risk of torpedoing that by coming out for it” in his budget.

However, Senate Budget Committee Chairman Kent Conrad, D-N.D., another member of the fiscal commission, complained, “If we're going to get this debt down to a level that's sustainable, then we've got to do substantially more than $1 trillion worth of deficit reduction in the next decade. We just do."

Under the administration’s budget, Pentagon spending is slated to decline slightly from this year’s spending levels, but at $707.5 billion would still be a 6.1 percent increase over 2010 spending. Secretary Robert Gates laid out $78 billion in military cuts over the next five years by eliminating the Marine Corps Expeditionary Fighting Vehicle, the procurement of the Army Surface Launched Medium Range Air-to-Air Missile defense system and the Navy’s SM-2 Block III surface-to-air missile.

But those savings are largely poured back into additional procurement of existing weapons systems or continuing to develop costly programs like the F-35 Joint Strike Fighter. While military research and construction are slated to decline by about $13 billion compared to 2010, procurement is slated to rise more than $8 billion and routine operations and maintenance receives nearly a $20 billion bump.

Obama Timid, Others Bullish on Economic Growth

The economic forecast underlying the Obama administration’s new Fiscal 2012 budget shows moderately stronger growth this year than in 2010, continued subdued inflation and a stubbornly high jobless rate of 9.3 percent this year and 8.6 percent in 2013.

This is no rosy scenario crafted to allow budget deficits to look smaller than they would with a different set of projections. The 3.1 percent estimate for this year’s rise in the gross domestic product is exactly the same as in latest forecast from the Congressional Budget Office and little different from the latest outlook update from the International Monetary Fund and the most recent number in the Blue Chip Economic Indicators compilation of private forecasts.

More importantly, the administration’s growth figures could be too modest, at least in the short term. They are lower than those of some prominent forecasters, such as those at Macroeconomic Advisers and Goldman Sachs. For one thing, getting the budget out this month meant the administration forecast had to be locked up in mid-November and CBO’s in early December. Both therefore missed an apparent acceleration in growth late last year and the surprising plunge in the unemployment rate from 9.8 percent in November to 9 percent last month.

Chris Varvares of Macroeconomic Advisers said in an interview that acceleration and the new stimulus in the tax legislation agreed to by Obama and congressional Republicans in December provided “a pretty solid jump off” for the economy this year. His firm expects growth over the course of 2011 to reach 4.3 percent, aided by the 2 percentage point cut in the Social Security payroll tax rate and the extension of long-term unemployment insurance benefits.

Moreover, Varvares said that unlike last year when the big risk was that growth would turn out to be weaker than expected, the risks now appear to be balanced. That is, it’s a likely growth will exceed 4.3 percent as fall short of it. “Would you believe a 6 percent quarter in the second half?” he asked.

Such faster growth could bring the jobless rate down to about 8.5 percent in this year’s fourth quarter—about what the administration predicts as an average for 2012. As for inflation, Macroeconomic Advisers and CBO expect if anything it will be more subdued than in the Obama forecast.

Goldman Sachs economists have told the firm’s clients to look for GDP gains to accelerate to a 4 percent pace this spring and to be between 3 percent and 4 percent for the year, with unemployment falling only to 9 percent by the end of the year while core inflation—that is excluding volatile food and energy prices—remains less than 1 percent.

The forecasts begin to diverge in 2013. Macroeconomic Advisers and Goldman Sachs expects growth to dip back to about 3.5 percent, the Blue Chip average shows 3.2 percent and CBO only 2.8 percent. In contrast, the administration forecast has growth accelerating to 4 percent in 2012 and on to 4.5 percent in 2013. CBO also has it increasing in 2013 but only to 3.5 percent.

All of the forecasts, however, show the jobless rate falling to around 7.5 percent in 2013.

The latest round of Federal Reserve officials’ forecasts generally were similar to the administration’s figures, including an expectation that growth would continue to accelerate in 2012 and 2013. Two Fed officials predicted that growth this year would be as low as 2.4 percent to 2.7 percent while a majority thought it would be around 3.5 percent."

In the explanation of the administration forecast, the Analytical Perspectives portion of the budget says, “The U.S. economy has enormous room for growth in 2011, although there are factors that could limit that growth. On the positive side, real GDP grew 3.2 percent in the fourth quarter, and 2011 should get off to a solid start.”

Those factors include potentially lingering effects from the financial crisis, slow foreign growth that might restrain demand for U.S. exports and the phasing out of the stimulus package enacted early in 2009.

The Analytical Perspectives section also provides estimates of how the deficit might change if economic growth were faster or slower than shown in the forecast. For instance, if growth was about a percentage point faster this year—as in the Macroeconomic Advisers forecast—it would lower the deficit by about $19 billion in Fiscal 2011 and about $43 billion the following year.

Obama Administration’s Unprecedented Fraud Fighting Pays Off

More than most seniors, Jacqueline Jefferson of Philadelphia, PA, knows that bad actors looking to defraud Medicare have lots of tricks up their sleeves &ndash and persistence.

Seven years ago, Jacqueline was reviewing her Medicare medical statement and noticed a number of false charges. She did the right thing and alerted Medicare. She also realized that many of her fellow Medicare patients may not know they are at risk for fraud &ndash or may be afraid to step forward. The experience inspired her to join the Senior Medicare Patrol (SMP) &ndash a group of senior citizen volunteers who educate and empower their peers to identify, prevent and report health care fraud.

Thanks to the Obama Administration, funding for the SMP has increased by 75 percent from FY 2008 to FY 2011. In 2010, nearly 5,000 volunteers helped educate about 300,000 Medicare patients at 8,300 community anti-fraud events. And those volunteers held more than 70,000 one-on-one counseling sessions on potential Medicare fraud, waste or abuse cases &ndash more than double the number in 2009.

That&rsquos a good thing &ndash because, like many seniors, Jacqueline was the target of yet another fraud attempt. She was contacted multiple times by telemarketers offering free diabetic supplies in exchange for her Medicare number &ndash even though she isn&rsquot a diabetic. You can see her story here.

These efforts are part of the unprecedented focus the Obama Administration has brought to both stopping fraud before it happens, and recovering fraudulent Medicare payments and prosecuting fraudsters.

Today, the Departments of Justice and Health and Human Services (HHS) released an updated annual report showing that, for the second year in a row, anti-fraud efforts have recovered more than $4.1 billion in fraudulent Medicare payments. Compare this to just $2.14 billion recovered in FY 2008. Prosecutions are way up too: the number of individuals charged with fraud increased from 821 in fiscal year 2008 to 1,430 in fiscal year 2011 &ndash nearly a 75 percent increase.

The Obama Administration is doing more to stop fraud before it happens. For example, before this Administration a fraudster could swindle Medicare for millions of dollars in Florida, close up shop, move to Detroit, and attempt to reestablish the same scheme without ever being noticed. Now, CMS and Department of Justice officials are tracking fraud scams as they move across the country, so that criminals are spotted when they try to re-enroll into Medicare or Medicaid.

This is just one of many new ways we&rsquore working hard to protect taxpayer dollars from fraud. Check out this fact sheet on how our work on fraud compares to the old rules and all the new tools the Affordable Care Act created to help fight fraud.


The Preamble of the Constitution states that providing for the common defense is among the highest priorities of the federal government. Obama Administration budget policy seeks to make it the lowest priority. The Preamble also directs the federal government to “secure the Blessings of Liberty.” Since the end of World War II, U.S. leaders have recognized that sustaining American liberty is all but impossible if America is an island of liberty in a world dominated by aggressive authoritarian and totalitarian nations. Accordingly, after the unhappy experiences of the first half of the 20th century, the U.S. has sought to expand security and liberty around the world by establishing a system of alliances in key regions and backing this system with an array of security commitments.

In sharp contrast, the Obama Administration’s budget policies are reducing America’s military capacity so drastically that upholding these commitments will become impossible over time. A conservative Congress, which as the name implies should focus on preserving essential American values, institutions, and commitments, would necessarily reject the Obama Administration’s defense budget proposal.

—Baker Spring is F. M. Kirby Research Fellow in National Security Policy in the Douglas and Sarah Allison Center for Foreign Policy Studies, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, at The Heritage Foundation.

[1]U.S. Office of Management and Budget, Budget of the United States Government, Fiscal Year 2013 (Washington, D.C.: U.S. Government Printing Office, 2012), at (February 13, 2012).

[2]U.S Department of Defense, “Sustaining U.S. Global Leadership: Priorities for 21st Century Defense,” January 2012, at (January 30, 2012).

[3]Stuart M. Butler, Alison Acosta Fraser, and William W. Beach, eds., Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity, The Heritage Foundation, 2011, at (February 14, 2012).

[4]The Heritage Foundation, “A Strong National Defense: The Armed Forces America Needs and What They Will Cost,” Heritage Foundation Special Report No. 90, April 5, 2011, at (February 6, 2012).

[5]Barack Obama, “Press Conference by the President,” The White House, June 29, 2011, at (February 2, 2012).

[6]Leon Panetta, “Major Budget Decisions Briefing from the Pentagon,” U.S. Department of Defense, January 26, 2012, at (February 6, 2012).

[8]Barack Obama, “Remarks by the President on the Defense Strategic Review,” The White House, January 5, 2012, at (February 6, 2012).

[9]U.S. Office of Management and Budget, Budget of the United States Government, Fiscal Year 2013: Historical Tables (Washington, D.C.: U.S. Government Printing Office, 2012), p. 103, at (February 14, 2012).

[11]U.S. Office of Management and Budget, supplemental materials for Budget of the United States Government, Fiscal Year 2013: Analytical Perspectives (Washington, D.C.: U.S. Government Printing Office, 2012), February 13, 2012, Table 32-1, at (February 14, 2012).

[12]U.S. Department of Defense, “Sustaining U.S. Global Leadership.”

[14]Obama, “Remarks by the President on the Defense Strategic Review” (emphasis added).

[15]Panetta, “Major Budget Decisions Briefing from the Pentagon.”

[16]U.S Department of Defense, “Sustaining U.S. Global Leadership,” p. 6.

[17]U.S. Department of Defense, “Defense Budget Priorities and Choices,” January 2012, p. 7, at (February 8, 2012).

[18]“Asia–Pacific Strategy Exposes Navy Shipbuilding Plan to Criticism,” Defense Daily International, February 3, 2012, at (February 8, 2012).

[19]Barack Obama, “Message from the President on the New START Treaty,” The White House, February 2, 2011, at (February 9, 2012).

[20]U.S. Department of Defense, “Defense Budget Priorities and Choices,” p. 8.

[21]Obama, “Message from the President on the New START Treaty.”

[22]The White House, “Fact Sheet: An Enduring Commitment to the U.S. Nuclear Deterrent,” November 17, 2010, at (February 14, 2012).

[23]U.S. Office of Management and Budget, Budget of the United States Government, Fiscal Year 2013, p. 104.

[24]U.S. Department of Defense, “Major Budget Decisions Briefing at the Pentagon,” January 26, 2012, at (February 9, 2012).

[25]Bill Gertz, “Nuking Our Nukes,” The Washington Free Beacon, February 14, 2012, at (February 16, 2012).

[26]News release, “Markey Introduces SANE Act to Cut Bloated Nuclear Weapons Budget,” Office of U.S. Representative Ed Markey, February 8, 2012, at (February 9, 2012).

[27]U.S Department of Defense, “Sustaining U.S. Global Leadership.”

[28]U.S. Department of Defense, “Major Budget Decisions Briefing from the Pentagon.”

[29]Congressional Budget Office, “Evaluating Military Compensation,” June 2007, p. 32, at (February 23, 2012).

[30]Barack Obama, “Remarks by the President in the State of the Union Address,” The White House, January 27, 2010, at (February 13, 2012) (emphasis added).

[31]Baker Spring, “The FY 2012 Defense Budget Proposal: Looking for Cuts in All the Wrong Places,” Heritage Foundation Backgrounder No. 2541, April 5, 2011, at (February 13, 2012).

[32]Robert M. Gates, speech at the American Enterprise Institute, Washington, D.C., May 24, 2011, at (February 15, 2012).

[33]Barack Obama, “Remarks by the President in the State of the Union Address,” January 24, 2012, at (January 25, 2012) (emphasis added).

[34]Butler et al., Saving the American Dream.

[35]Jack Lew, “Security Spending in the Deficit Agreement,” U.S. Office of Management and Budget, August 4, 2011, at (January 24, 2012).

[36]Barack Obama, “Statement by the President on the Supercommittee,” The White House, November 21, 2011, at (January 24, 2012).

[37]U.S Department of Defense, “Sustaining U.S. Global Leadership,” p. 1.

[38]Obama, “Remarks by the President in the State of the Union Address,” January 25, 2012.

[39]Obama, “Press Conference by the President.”

[41]For The Heritage Foundation’s recommendation on the total force structure for the long term, see The Heritage Foundation, “A Strong National Defense,” pp. 25–26.


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