Obama's Spending Legacy: A $5.2 Trillion Deficit Monster

Donald Lambro

3/21/2012 12:01:00 AM - Donald Lambro

WASHINGTON - The government's monstrous budget deficits continue their meteoric rise under Barack Obama's big spending policies, further threatening America's shaky economy and future growth.

The Congressional Budget Office last week released a revised estimate of the Obama administration's spiraling deficit, forecasting it will hit $1.2 trillion in the 2012 fiscal year which will end a few weeks before Election Day. This latest revision pushes the deficit up by another $100 billion and it will likely climb higher before the fiscal year ends.

This is the fourth straight trillion dollar-plus deficit under Obama's presidency and the highest in U.S. history.

He came into office in 2009 with thousands of proposals to spend trillions of dollars and has run up annual deficits totaling more than $5.2 trillion that have pushed total debt to over $15 trillion.

This means the entire national debt exceeds our gross domestic product (GDP), the measure of all the goods and services we produce each year. In other words, Obama is spending beyond our means.

Obama's record-shattering deficits are as follows: $1.4 trillion in 2009; $1.3 trillion in 2010; $1.3 trillion in 2011; and an estimated $1.2 trillion in 2012.

In 2007, the year before the nation's economy plunged in the Great Recession, the federal budget deficit was a tame $167 billion. Even in 2008, the first full year of the subprime mortgage debacle and the last year of George W. Bush's presidency, the deficit was a manageable $438 billion.

But it isn't just the budget deficit that has been climbing at a furious pace under this president. Gas prices, which were around $1.80 for a gallon of regular January 1, 2009, have on average skyrocketed to nearly $4 for a gallon of regular, according to AAA. The average price was running $3.52 just a month ago.

But if the pump price on a gallon of gas isn't shocking enough for you, sharply rising health care costs under the new Obamacare law make the cost of a gallon of gas look like bargain in comparison.

In 2009, Obama promised the American people that his mandated health insurance plan would cost "around $900 billion over 10 years."

But CBO reported last week that Obamacare will cost at least twice that much, or $1.76 trillion. And the costs will likely rise in the years to come as the babyboomers grow older.

That's why Republicans have begun to wage a new political assault on the unpopular Obamacare law as it nears the two-year anniversary of its enactment.

"The president promised, 'If you like your doctor or health care plan, you can keep it," Sen. John Cornyn, the chairman of the GOP's Senate campaign committee, says in an op-ed column for the Austin American-Statesman.

"In fact, employers have already started dropping insurance coverage in direct response to Obamacare. The president promised his law would 'slow the growth of health care costs for our families, our businesses and our government.' Instead, premiums for family coverage rose by 9 percent last year," Cornyn writes.

Higher costs for gasoline and health care, along with a weak, high unemployment economy, will be lethal issues in the coming general election, both for Obama and the Democrats generally.

A Gallup poll says the lackluster Obama economy and the nation's persistently high unemployment rate are the two top concerns that Americans say will most influence their vote for president.

But Obama's record budget deficits and the nation's growing debt load are at No. 3, with 79 percent of voters saying the issue is either "extremely or very important" in how they will vote in November.

Obama is already out on the hustings defending his failed presidency, but he has little if anything to say about his budget deficits and the national debt. It's as if the issue does not exist in his political thinking, or he does not think voters will vote on that issue.

Obama's campaign strategists hardly touch the deficit and debt issues, either, and you rarely hear Democratic leaders in Congress calling for action to bring down the deficit. It is an orphan issue for which no one wants to take responsibility. Democrats are focused on more spending, not cutting.

In the past three-plus years of this administration, even when Obama's party controlled both houses of Congress, Democrats have not passed a budget.

The Republican House this week unveiled its budget plan to curb spending and shrink the deficit, but it's already dead on arrival in the Senate where Democratic leader Harry Reid wants to spare his party the discomfort of voting against GOP spending cuts in an election year.

But this isn't an issue that's going away. Instinctively, voters connect growing deficits and debt as the enemy of a prosperous economy and rising employment. Economic analysts have arrived at the same conclusion.

"Ultimately, what goes up must come down. In the case of the federal budget, this means that a deficit-financed boost to growth will eventually lead to a drag," financial analysts Jan Hatzius and Alex Phillips concluded in study last year.

Writing in the American Economic Review Papers and Proceedings at the end of 2009, economists Carmen M. Reinhart and Kenneth S. Rogoff wrote: "Our main finding is that across both advanced countries and emerging markets, high debt/GDP levels (90 percent and above) are associated with notably lower growth outcomes..."

The budget plan Obama sent to Congress last month is filled with preposterous assumptions like near-4 percent economic growth that he says will sharply cut the deficit by 2017 when he hopes he'll be leaving office after a second term.

If you buy that one, says economist Peter Morici, Mayor Bloomberg "is selling shares in the Brooklyn Bridge."