Following Friday’s troubling news from the Congressional Budget Office that this year’s deficit will approach a staggering $1.5 trillion, The Washington Post editorialized over the weekend, “In his State of the Union address Tuesday night, President Obama failed to present a credible plan for long-term debt reduction. It’s no secret that we think he made a big mistake. If America can’t get a handle on its finances, everything else is at risk: military strength, the safety net for the poor, the ability to invest for future economic growth. But now that the president has punted, is there any conceivable path toward fiscal sanity?” The editors urged Obama to show some “presidential leadership” on the debt issues.
Appearing on “Meet the Press” yesterday, Senate Republican Leader Mitch McConnell made a similar point. He told NBC’s David Gregory, “The American people are asking us to tackle these problems. I think the president needs to be more bold. We’re prepared to meet. I’ve got a lot of new members, and Speaker Boehner does as well, who came here to tackle this big problem. . . . We’re going to give the president an opportunity to reduce our annual deficit, which is completely out of control… I agreed with the Washington Post editorial this morning, I was disappointed in the president’s unwillingness to address our long-term unfunded liabilities.”
As Bloomberg News noted, “Senate Minority Leader Mitch McConnell, a Kentucky Republican, said President Barack Obama and legislators from both political parties need to work together to reduce U.S. debt. ‘We have two opportunities, both the continuing resolution and the debt ceiling, to try to accomplish something on a bipartisan basis on both our short-term debt and our long-term unfunded liability,’ McConnell said in a television interview [Sunday] on NBC’s ‘Meet the Press.’ ‘The president ought to step up to the plate with us and tackle it together.’”
So what is President Obama’s plan? On CBS’ “Face the Nation” yesterday, incoming White House Chief of Staff William Daley seemed to acknowledge the problem, but was underwhelming in what he suggested for a path forward. He told Bob Schieffer, “[W]e all agree there must be cuts to this government. And again, you’re going to see this President layout a very substantial cut already . . . the freeze amounts to four hundred billion dollars over ten years.”
But a freeze doesn’t actually reduce the size of government. On the contrary, it locks in the unsustainable levels of spending from the last two years. Americans sent a clear message to Washington in November to stop spending so much of their money and reduce the size of government. Will President Obama commit to a serious plan to do those things, or will he instead look to freeze spending at the huge levels of the last two years that have led to such massive deficits?
As Leader McConnell said yesterday, “Let’s look at what went [on] the last two years. We added $3 trillion to the deficit and lost 3 million jobs. We took government spending from 20% of gross domestic product, GDP up to 25% of GDP. Look, what we’ve been doing doesn’t work. And I think the message from the American people was clear, don’t do that anymore.”