What others are saying: The big red budget

The following editorial appeared in the Chicago Tribune on Friday, Feb. 27:

President Barack Obama hit the nation with some astounding numbers on Thursday: a $1.75 trillion deficit for the current fiscal year and a $3.55 trillion red-ink budget for next year. Oh, and a big tax increase on the wealthy to ... in large part expand the federal government.

This comes a week after he promised to cut the deficit in half in four years. That will be no mean feat. The $1.75 trillion federal deficit will total 12.3 percent of the nation's yearly economic output. That represents the greatest deficit as a share of economic output in some 60 years.

Obama's tax increases and health-care plans don't come as a shock. He promised these would be his priorities during the presidential campaign. But his spending plans don't acknowledge the impact of the massive stimulus and financial bailout costs the government has incurred in recent weeks and months. And there's more bailout to come.

Congress, meanwhile, is rambling down a reckless path. The House on Wednesday passed legislation that hikes domestic spending by 8 percent for the rest of this fiscal year. Taxpayers for Common Sense, a nonpartisan budget watchdog group, has identified 8,570 earmarks for special projects at a cost of $7.7 billion. There may be more.

This is the "fiscal discipline" Obama promised in his address on Tuesday to Congress? No wonder the members rose so often to applaud. Earmarks! Hooray!

The president's 2010 budget includes domestic spending increases of an additional 7 percent. Remember, that's on top of the 8 percent increase in spending proposed for the rest of this year.

Obama touted "honest accounting" in his 2010 budget. His administration deserves credit for avoiding the off-budget spending subterfuge favored by the Bush administration. But Obama's ambitious 10-year plan also depends on some ambitious assumptions. It anticipates the U.S. economy will grow by 3.2 percent next year and more than 4 percent each of the following three years. Obama also builds this budget around his ability to enact a controversial carbon cap and trade plan and allocate revenues from that to middle-class tax cuts. His $634 billion down payment to fund universal health care over the next decade depends on raising taxes on the wealthy. He would raise taxes on income and reduce tax deductions for such items as charitable giving. Remember what that would do — it would create a disincentive for the wealthy to give to charity.