Yesterday, the U.S. House of Representatives Ways and Means Subcommittee on Income Security and Family Support held a hearing on the Temporary Assistance for Needy Families (TANF) program and its role in providing assistance to struggling families.
The Obama Administration’s witness, Assistant Secretary for the Administration for Children and Families, Carmen Nazario, included in her testimony a request to extend for a year the TANF Emergency Fund at a cost of $2.5 billion. This would extend a $5 billion program created in the Stimulus package last year that severely undermines the success of welfare reform. It essentially pays states for every new TANF case added to the caseload creating a perverse incentive to grow the size of the welfare state.
Robert Rector, Senior Research Fellow at The Heritage Foundation, testified at the same hearing that federal and state welfare spending under the Obama Administration is already on a trajectory to spend $953 billion in 2011 on means-tested programs for the poor. This prompted the Ranking Republican on the Committee, Congressman John Linder, to ask Ms. Nazario, “Is it your testimony that $953 billion is not enough?” See her response in the video above.
Rector’s testimony went on further to say:
President Obama’s increase in federal means-tested welfare spending during his first two years in office is two and a half times greater than any previous increase in federal welfare spending in U.S. history, after adjusting for inflation.
According to the long-term spending plans set forth in Obama’s FY 2010 budget, combined federal and state spending will not drop significantly after the recession ends. In fact, by 2014, welfare spending is likely to equal $1 trillion per year…..$10.3 trillion over the next 10 years. This spending will equal over $100,000 for each taxpaying household in the U.S.
It’s clear from the President’s 2011 budget as well as those testifying on behalf of the Administration that continuing to increase welfare spending at historic levels is a priority despite the record level deficit. In these tough economic times, President Obama is intent on keeping his promise to “spread the wealth” while at the same time bankrupting America.
Last Friday, the Congressional Budget Office (CBO) released its analysis of the president’s 2011 budget submission to Congress. This report hasn’t gotten nearly the attention it deserves.
When the administration released its budget in early February, the news seemed bad enough. By its own reckoning, the Obama administration’s budget plan would result in massive deficits and borrowing if adopted in full. According to the administration’s estimates, the president’s budget plan would produce deficits totaling $10.1 trillion over the period 2010 to 2020, and by 2020 federal debt would reach $18.6 trillion.
But now we learn that that was the rosy scenario.
According to CBO, the Obama budget plan would run up much larger budget deficits and pile up even more debt than the administration reported in February.
Over the period 2010 to 2020, CBO expects the Obama budget would run a cumulative deficit of $11.3 trillion — $1.2 trillion more than the administration predicted. By 2020, total federal debt would reach an astonishing $20.3 trillion — up from $5.8 trillion at the end of 2008.
The president likes to say he inherited a mess. He did in fact enter office during a deep recession that sent deficits soaring on a temporary basis. But his policies have unquestionably made an already difficult medium- and long-term budget outlook much, much worse. The problem is that President Obama is a world-class spender. He wants to pile massive new commitments on top of a bloated and unreformed government. He is willing to raise taxes to pay for some of his wish list, but far from all of it. For the rest, he plans to run up the nation’s debt with reckless abandon.
CBO’s numbers tell the story.
Over the next ten years, CBO says the Obama budget would increase federal spending by $2.3 trillion, including $0.8 trillion in net interest costs on the additional borrowing that would be required.
Bad as that is, it’s a lowball estimate. The president’s budget assumes that war-fighting funds will plummet from $130 billion in 2010 to just $50 billion in 2012 and every year thereafter. No one believes this will happen. More realistic assumptions would add $500 billion or more to the president’s defense funding request over a ten-year period.
The biggest problem in the federal budget is runaway entitlement spending. And so what would the Obama budget do? Increase entitlement spending, of course. By $1.9 trillion over ten years, according to CBO. In 2020, federal entitlement spending would reach $3.3 trillion, up from $2.1 trillion in 2009.
The administration has been touting a supposed three-year spending “freeze” as evidence of its determination to cut the budget back. But only a very small portion of the budget would be frozen, and only after the administration had spent two years stuffing in more funding. CBO expects that discretionary spending under the Obama budget, excluding war funds and Pell Grants (which would become an entitlement), will increase by $0.5 trillion over ten years.
Two years ago, CBO expected total federal spending to reach $4.3 trillion in 2018. Now, if the president’s budget plan were adopted, CBO projects spending would exceed $5.0 trillion in 2018.
Between 2010 and 2030, the population age 65 and older is expected to rise from 41 million to 71 million people. CBO projects spending on Social Security, Medicare, and Medicaid in 2030 will reach 14.4 percent of GDP, up from 9.8 percent today. That will be like adding a whole new Social Security program to the budget without any additional revenue to pay for it.
The federal government is drowning in unaffordable entitlement commitments. President Obama’s response is to spend, entitle, and borrow even more, while he can. And then, with an even bigger government locked into the “baseline,” he plans to pivot and use the prospect of a debt crisis he made much more probable to push for a massive tax increase.
Unfortunately for the president, the public is already onto this game. And they want no part of it.