Obama Picks Up Bush's Spendthrift Budget Baton

by Mike Godfrey, Tax-News.com, Washington

13 March 2009

Despite his ambition to usher in "a new era of responsibility" with regard to the way Washington spends taxpayer dollars, Obama's first budget picks up the spending baton from the previous Bush administration and runs with it, according to an analysis of the President's tax and spending plans by the Cato Institute.

At last month's White House 'Fiscal Responsibility Summit' Obama said that his goal was to reverse the irresponsible spending of the Bush years by making the budget process more transparent, cutting wasteful spending and eventually narrowing the federal deficit and lowering government debt. But, according to Chris Edwards, Director of Tax Policy at the Cato Institute, the Obama plan not only includes the huge cost of the bank bail-outs and the stimulus plan, but also foresees a long-term increase in regular domestic spending.

"The plan builds on spending precedents set by President Bush, and would boost non-defense outlays to a record share of the economy," Edwards wrote in a commentary on Obama's budget.

While Obama has promised to save the taxpayer money by reforming government procurement and cutting 'pork barrel' spending, the budget's main thrust is to ramp up spending on such items as health care, energy subsidies, college aid and tax credits so that by 2019, non-defense spending would hit 17% of America's gross domestic product - 30% higher than under President Clinton in the late 1990s, notes Edwards.

"The boldness of Obama’s spending plans is partly attributable to the spendthrift example set by President George W. Bush, who ramped up both defense and nondefense spending," Edwards wrote, adding that Bush’s attempts to stimulate demand with temporary tax cuts and financial bailouts "laid the groundwork for similar Obama policies."

"The point here is not to condemn President Bush, but to illustrate that party labels have meant very little in recent federal expansions. Each recent president has added new subsidy programs, expanded existing ones, and imposed new mandates on the states. Those changes have been usually retained by later presidents, resulting in outlays growing ever larger," Edwards added, going on to conclude:

"If Obama succeeds in expanding the government, it will probably function worse than under President Bush because it will be even harder for administrators to keep track of all the spending. Sadly, Obama’s first budget sets a course for more government bloat, more economic distortions, and ultimately lower standards of living for everyone who is not living off of federal hand-outs."

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