Obama’s failed budget. . .

and what to do about it.

Calling Obama’s budget “disastrous,” the Atlantic’s Megan McArdle writes:

it's time to panic. This deficit is $700 billion higher than the CBO [Congressional Budget Office] projected in August 2009, of which $500 billion is lower tax revenues, and $200 billion is new spending. It's also $500 billion less revenue and $100 billion more spending than the CBO was expecting as late as August of last year, thanks to the extension of the Bush tax cuts. For all that I keep hearing about deficit reduction and PAYGO rules, somehow those "fiscally responsible" Democrats have given us the largest peacetime deficit in history, one that keeps growing beyond all expectations. . . Unless politicians get serious about deficit reduction right now. . . they're going to tax-cut-and-spend us straight into the poorhouse.

The National Review’s Yuval Levin describes Obama’s budget as “a political calculation that voters do not want to face the coming debt crisis, and so it would be bad politics to force them to do so.” But whatever the politics, Levin believes the substantive result is:

a willful blindness that makes for a budget . . . completely detached from reality. No entitlement reform, no tax reform, no significant spending reform, indeed no meaningful change of direction of any sort — the budget does nothing to lessen the burdens with which we now stand to saddle the rising generation, and which will stifle growth and prosperity along the way. . . The president appears to have decided to spend the next two years pretending there is no problem to solve, and therefore that Republican proposals to rein in spending are just mean-spirited cuts offered up for kicks. This is, above all, an appalling failure of leadership.

Levin believes its now “up to Republicans” to propose “a gradual course correction” on the budget, and explain to voters “why it is sensible, responsible, and essential.”

Levin’s advice to Republicans is cautious. Naturally, the party is tired of being burned by the interest groups and voters hurt by “mean spirited” GOP budget cuts.

But George Will, in a recent column on GOP presidential candidate Rick Santorum, indirectly pointed out how Republicans can capture the high ground on debt reduction: make freedom from debt a moral issue. Will praised Santorum, who was defeated in his 2006 senate re-election bid and saw his career seemingly ended, for building his presidential campaign around quasi-religious truths:

Santorum does not ignore economic issues, but as a relentless ethicist, he recasts those as moral issues: "What is European socialism but modern-day monarchy that 'takes care' of the people?" He is, of course, correct that America's debt crisis is, at bottom, symptomatic of a failure of self-control, a fundamental moral failing.

Perhaps this is a key to turning around the country on the debt question—make debt about failed self-control. It’s a virtue families meeting around their kitchen tables well understand.

It would also help to clear away fog surrounding the question of entitlements, usually thought of as social security and Medicare. Entitlements can’t keep growing, for they are at the heart of our rising debt. Yet every Republican effort to touch social security and Medicare has cost the party dearly.
Dick Morris, the former Clinton advisor now a rabid Republican, has taught us that Obama’s deficit growth came from a rapid runup in discretionary, non-defense spending and in welfare entitlements like Medicaid and food stamps, not from social security and Medicare gains (see chart). Domestic spending increased by $200 billion in the two Obama years. And Medicaid, food stamps and other welfare entitlements jumped by $140 billion over the same period. That’s $340 billion a year Republicans could cut from the debt, without touching $1 of social security or Medicare!

Regarding entitlements, House budget chair Paul Ryan (R-WI), in a headline-grabbing statement, said today that if Obama won’t lead on entitlement reform, House Republicans will. Ryan promised that the budget he puts together in April will include entitlement cuts.

Perhaps Will and Morris have shown how Ryan can deliver on the promise of entitlement reform without killing Republican re-election chances—go after big domestic spending and welfare cuts, and do so using the moral imperative of reducing debt.