08.09.2012 1

Another Trillion dollars closer to the fiscal cliff

By Rick Manning — The Congressional Budget Office provided a glimpse at the 10-month mark of the federal fiscal year 2012, and the results are grim.

Outlays are virtually the same through 10 months of 2012 as they were in 2011 at $3 trillion and revenues collected during this same period are slightly higher at approximately $2 trillion.  This means that our nation is guaranteed to run another trillion dollar-plus budget deficit this year.

The nitty gritty numbers show that in the federal fiscal spending year ending Sept. 30, 2011, the government ended up spending more than $3.6 trillion with revenues of $2.3 trillion leaving a $1.3 trillion deficit — that’s $1,300,000,000,000.00.  If laid end to end, 1.3 trillion dollar bills would go around the circumference of the earth 5,040 times.

If the spending and revenue of the first 10 months of FY12 continue at the same rate through the end of the year, FY12 will be slightly less disastrous with outlays projected to hold steady at $3.6 trillion while revenues increase to $2.4 trillion leaving a $1.2 trillion deficit give or take $50 billion.

That makes four consecutive years that Obama has presided over a budget deficit in excess of $1.2 trillion and more than $5 trillion added to the deficit on his watch.

The chart below from the Office of Management and Budget demonstrate the reality of the budget wars in D.C. and provides some small hope to those who have been frustrated by House Republicans’ seeming inability to win the spending battle.  If there is solace to be found, the fact that actual outlays are a full $200 billion short of Administration estimates is some small win.  It is this flattening of the outlays that is largely responsible for the meager reduction of our exploding deficit that was accomplished.

Before our nation’s budget cutters go howling in the streets declaring victory is near, if this Congress had just held spending to the same levels as they were the year they were elected, the budget deficit would have dropped by around $150 billion more.

While Obama flies courtesy of the taxpayer around the country declaring a need for higher taxes, the point that he hopes no one notices is that during the Clinton Administration tax revenues only exceeded $2 trillion one time in his last year FY 2000, but in that year, outlays were under $1.8 trillion. Today, revenues are projected to have grown by 20 percent since 2000, while outlays have doubled in those 12 years.

 

Incredibly, with a supposed one-time stimulus and one-time bailouts that bloated the budget outlays by more than $500 billion from 2008 to 2009, those one-time outlays have somehow gotten cooked into the system during Obama’s rule.

Any honest analysis would have to conclude that while revenues have not increased as the rose-colored economic projections had predicted, the acceleration of federal government spending is the primary driver of the budget deficit.

Unfortunately, in this political world, we have a president running for re-election who claims in advertising with a straight face that he has a plan to pay down the debt, when his latest budget that was unanimously rejected in the Democratic Senate does not project a budget surplus over any time horizon.  This means that his claim to have a plan to “pay down the debt” has remained a mystery to Congress and the public for his entire four years in office, and his claim is nothing more than a craven attempt to fool voters into going forward over the fiscal cliff.

In this political world, neither political party’s leadership seems particularly interested in making the kind of cuts to federal outlays that are strangling our nation’s growth and the ensuing revenue growth that could bring the federal government balance sheet back from the brink, because to do so might offend someone who is benefitting from big government.

When simple proposals like one from Congressman Marsha Blackburn (R-TN) that would cut 1 percent across the board from the budgets of various government agencies and departments are routinely rejected, it is difficult to imagine Congress rising to the occasion to actually rollback the outlays to bring them more in line with the revenue growth.

In November, voters get one more and perhaps a final chance to stop the nation’s economy from plummeting over a deficit cliff.  Politicians of both political parties should be reminded every time they speak to a voter, that cutting spending has got to be job one in Washington, D.C., in 2013.

There can be no more excuses from those who think that going over the rapidly approaching fiscal cliff at 50 mph is somehow better than going over at 100 mph — either way, you are just as dead.

Rick Manning is the Communications Director of Americans for Limited Government. You can follow Rick on Twitter at @RManning957.

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