On April 13, 2011, after calls from both sides of the political aisle for leadership on America’s ballooning deficits and debt, President Obama delivered what has been dubbed “The Debt Speech” at George Washington University. It was widely considered a response to House Budget Committee Chairman Paul Ryan’s (R-Wis.) “Path to Prosperity” budget proposal, which lays out a blueprint for reducing federal spending by $6.2 trillion in the coming decade. That budget was approved by the House on April 15, 2011, by a vote of 235-193.

In many ways, the President was asking for a do-over on his fiscal year (FY) 2012 budget. The speech largely avoided references to specific deficit-reduction proposals, but it was long on criticism of “the other party” and lofty allusions to the President’s “vision of America.” It was a speech that any campaign manager could love, but one that ignored two central truths: first, the United States has a spending addiction, not a revenue problem. Second, there is a lot more waste in government than most politicians will acknowledge.

President Obama began his speech with some good old-fashioned Bush-bashing. He pointed out that in 2000, “America’s finances were in great shape,” but that over the eight years that followed, “We increased spending dramatically for two wars and an expensive prescription drug program.” By the time President Obama took office, he added, the “projected deficit, annually, was more than $1 trillion.” It is true that the federal government spent $1.79 billion in FY 2000 and collected $2.03 billion in revenue. Alarmingly, in his eight years in office, President Bush raised spending by $1.19 trillion, or 66 percent. By FY 2008, the deficit was already more than $400 billion, and growing.

President Obama’s story is that he inherited a massive deficit problem and has been working like crazy to eliminate it. In reality, President Obama raised spending an additional $836 billion in his first two years. In his speech he mentioned that it was necessary in a recession to “temporarily borrow even more,” but there is nothing temporary about the President’s spending plans. His FY 2012 budget projects that federal spending will cross the $4 trillion threshold in 2015. When that happens, the federal budget will have more than doubled since 2002. America’s gross domestic product will have done no such thing.

President Obama went on to dismiss the notion that America’s fiscal troubles could be alleviated by eliminating wasteful spending (at CAGW, our ears prick up when the President mentions waste and abuse). He said, “politicians are often eager to feed the impression that solving the problem is just a matter of eliminating waste and abuse.  You’ll hear that phrase a lot.  ‘We just need to eliminate waste and abuse.’  The implication is that tackling the deficit issue won’t require tough choices.” It is true that hard choices will be made in tackling the deficit, but the idea that eliminating mismanagement and inefficiency in government would not put a sizeable dent in the debt is insulting.

President Obama stated in his speech that he believes in the mission of programs like Medicare, Medicaid, and Social Security, programs that “guarantee us health care and a measure of basic income” and provide “care for millions of seniors in nursing homes, poor children, and those with disabilities.” These are inarguably worthy goals, but they are unachievable without addressing the very real problems of waste. For example, the Government Accountability Office (GAO) published a report in March 2011 that estimated $48 billion in improper payments were made by Medicare in FY 2010 alone, along with another $22.5 billion by Medicaid. In January 2010, the National Health Care Anti-Fraud Association estimated that Medicare had lost $100 billion to scams and identity theft in FY 2009.

Another GAO report from March that was ignored by President Obama identified 34 agencies, offices, and initiatives that provide similar or identical services to the same populations, along with 47 programs that are either wasteful or inefficient.  The list included 18 nutrition and food assistance programs, 47 job retraining programs, 80 economic development programs, 56 financial literacy programs, and $77 billion of waste at the Department of Defense. If a private organization were facing bankruptcy, its duplicative expenditures would be obvious, immediate cuts. The President’s reaction should be no different.

If President Obama was serious about the deficit, he would have come forward with tangible ways to cut spending, not a promise to reconvene down the road with an “independent commission” that will really get serious after the current plan has failed. Finally, he would have acknowledged that solving the deficit problem will require eliminating hundreds of billions of dollars in waste and abuse.

-- Luke Gelber