Spending Binge, Part Deux

Via-WSJ

Fiscal schizophrenia reigns in the White House.

By STEPHEN MOORE

Don't expect any Republican votes for the White House's new proposal for a $50 billion bailout of the states. Republican resistance to deficit spending is stiffening, even among moderates. GOP leaders in the House tell me that they were "shocked" at the latest spending plan to pay states to hire more teachers and police officers, adding that there are virtually "no votes" inside the House and Senate Republican caucuses for the new package of largesse. They see the Democrats' continued binge of spending as a political gift to ensure ever larger GOP pick-ups in the November elections.

"The debt is the biggest issue to American voters right now," says Tom Price, head of the conservative Republican Study Committee in the House. He adds that "there is still about $300 billion of stimulus money from last year's spending bill that hasn't been spent."

If Democrats pass the $50 billion for the states plus their $100 billion "jobs bill" now in front of the Senate, this would mark the third and fourth spending bills -- the stimulus plan and the Obama health care bill being the first two -- that will have been enacted almost exclusively with Democratic votes.

Republicans are also ramping up their attacks on the White House and Congressional Democrats for refusing to pass a budget, which is usually completed by the end of April. Budget Committee Republicans in the House have released new figures showing average spending for federal agencies has risen by more than 50% since 2008. Meanwhile, Republican Whip Eric Cantor's office has released figures showing that the administration's trumpeted freeze on domestic spending will lead to less than a 1% cut in federal spending or less than five cents for every dollar the stimulus bill spent.

Rep. Paul Ryan of Wisconsin released a new plan this week calling for $1.3 trillion of spending cuts over the next ten years. He lays down a marker by specifying he wants to return government agency spending "to pre-Obama levels."

Republicans plan to hammer the debt and deficit hypocrisy theme in the days and weeks ahead. White House economic adviser Larry Summers has lectured Congressional Democrats that now is a good time for the federal government to borrow to "stimulate demand" because interest rates are low. Yet the President keeps insisting that fiscal responsibility is an important priority of the White House. Republicans are having a field day. A recent email blast reminded supporters of a statement made by President Obama on November 18th: "It is important though to recognize if we keep on adding to the debt, even in the midst of this recession, that at some point, people could lose confidence in the U.S. economy in a way that could actually cause a double dip recession."

Fiscal schizophrenia reigns in the White House. One day the runaway debt is the main risk for a double-dip recession. The next day the threat is insufficient deficit spending from the federal government. Looking back, says Mike Pence, the Republican House Conference Chairman, "It's hard to believe that when Nancy Pelosi was running for Speaker in 2006, she actually promised that Democrats would balance the budget and restore fiscal responsibility."