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War, Tax Cuts & Recession - Not Obama Policies - Explain Deficit for Next Decade
There is a new analysis of the causes of the budget deficit by the Center on Budget and Policy Priorities. Here are some key findings from their report: Some critics charge that the new policies...
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Featured Blog Post
A Choice Between Prosperity and Decline
Speaking at a wind tower production facility in Iowa today, the President laid out his vision for a new clean energy economy, independence from foreign oil, keeping pollution out of our air and...
Published Date: December 17, 2009, 12 am
| Topics: |  Utah Democratic Party Blog |
There is a new analysis of the causes of the budget deficit by the Center on Budget and Policy Priorities. Here are some key findings from their report:
Some critics charge that the new policies pursued by President Obama and the 111th Congress generated the huge federal budget deficits that the nation now faces. In fact, the tax cuts enacted under President George W. Bush, the wars in Afghanistan and Iraq, and the economic downturn together explain virtually the entire deficit over the next ten years.
The events and policies that have pushed deficits to astronomical levels in the near term, however, were largely outside the new Administration’s control. If not for the tax cuts enacted during the Presidency of George W. Bush that Congress did not pay for, the cost of the wars in Iraq and Afghanistan that began during 
that period, and the effects of the worst economic slump since the Great Depression (including the cost of steps necessary to combat it), we would not be facing these huge deficits in the near term.
Without the economic downturn and the fiscal policies of the previous Administration, the Obama Administration budget would be roughly in balance over the next decade. That would put the nation on a much sounder footing to address the demographic challenges and the cost pressures in health care that darken the long-run fiscal outlook.
One of the major domestic initiatives of the Bush Administration was a new prescription-drug benefit in Medicare, known as Medicare Part D. This legislation was only partly paid for, and it added significantly to the deficit that President Obama inherited. But Part D outlays are coming in lower than CBO and the Medicare actuary expected. CBO now expects the net cost of Medicare Part D over that initial 2004-2013 period to be about $355 billion, as compared to the original $552 billion figure.
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Published Date: April 22, 2009, 04 pm
| Topics: | Caucuses, County Parties, Utah Democratic Party Blog |
Speaking at a wind tower production facility in Iowa today, the President laid out his vision for a new clean energy economy, independence from foreign oil, keeping pollution out of our air and water, and finally addressing the climate change problem that has been neglected for decades in Washington. The President was introduced by Richard Mulbrook, the current Maintenance Manager there -- and a former Maytag employee before the company closed its operations at the same plant. As the President explained, the transformation that happened at this plant in Iowa was a sign of the transformation that America can undergo with the right vision and the right investments:
I just had a terrific tour of the facility led by several of the workers and managers who operate this plant. It wasn't too long ago, as Rich said, that Maytag closed its operations in Newton. And hundreds of jobs were lost. These floors were dark and silent. The only signs of a once thriving enterprise were the cement markings where the equipment had been before they were boxed up and carted away.
Look at what we see here today. This facility is alive again with new industry. This community is still going through some tough times. If you talk to your neighbors and friends, I know they -- the community still hasn't fully recovered from the loss of Maytag. Not everybody has been rehired. But more than 100 people will now be employed at this plant -- maybe more, if we keep on moving. Many of the same folks who had lost their jobs when Maytag shut its doors now are finding once again their ability to make great products.
Now, obviously things aren't exactly the same as they were with Maytag, because now you're using the materials behind me to build towers to support some of the most advanced wind turbines in the world. When completed, these structures will hold up blades that can generate as much as 2.5 megawatts of electricity -- enough energy to power hundreds of homes. At Trinity, you are helping to lead the next energy revolution.
The President placed what was happening in Iowa in the context of two centuries of energy innovation in America, but noted America’s leadership in innovation had always been coupled with an alarming rise consumption. The President ran down the all-too-familiar list of problems our energy consumption and oil dependence brings, from those people face every day like prices at the gas pump, to those that have a broader but equally serious impact like the trade deficit, constraints on foreign policy, and the prospect of irrevocable climate change left as a burden for out children.
(President Barack Obama is given a tour of the Trinity Structural Towers Manufacturing Plant by Senior
Vice President, Mark Stiles, Wednesday, April 22, 2009, in Newton, Iowa. White House Photo/Pete Souza)
As the President has stated again and again, these problems also represent a fundamental weakness in our economy which will prevent long term stability as long as we refuse to address them. And while those interests who have profited off of this weakness have aligned to defend the status quo and paint change as a danger, the President forcefully framed what this choice is all about:
We can't afford that approach anymore -- not when the cost for our economy, for our country, and for our planet is so high. So on this Earth Day, it is time for us to lay a new foundation for economic growth by beginning a new era of energy exploration in America. That's why I'm here. (Applause.)
Now, the choice we face is not between saving our environment and saving our economy. The choice we face is between prosperity and decline. We can remain the world's leading importer of oil, or we can become the world's leading exporter of clean energy. We can allow climate change to wreak unnatural havoc across the landscape, or we can create jobs working to prevent its worst effects. We can hand over the jobs of the 21st century to our competitors, or we can confront what countries in Europe and Asia have already recognized as both a challenge and an opportunity: The nation that leads the world in creating new energy sources will be the nation that leads the 21st-century global economy.
America can be that nation. America must be that nation.
The President readily acknowledged that this is no easy task at hand, but for those who contend that this is idle idealism, the President offered a dose of reality:
Think about this. I want everybody to think about this. Over the last several decades, the rest of the country, we used 50 percent more energy; California remained flat, used the same amount, even though that they were growing just as fast as the rest of the country -- because they were more energy efficient. They put in some good policy early on that assured that they weren't wasting energy. Now, if California can do it, then the whole country can do it. Iowa can do it.
He also pointed to benefits already being reaped from the Recovery Act, and the $15 billion dedicated each year in his budget for the development of clean energy sources that would amplify those gains. He discussed the jobs and other long-term economic gains of his investments in high-speed rail and other mass transit. And he also made news with one more specific announcement: "Through the Department of Interior, we are establishing a program to authorize -- for the very first time -- the leasing of federal waters for projects to generate electricity from wind as well as from ocean currents and other renewable sources."
The President then went on to address an issue generating heated debate in Congress right now, namely climate change. While agreeing that the economy and jobs are the most urgent priority right now, he also left no doubt that climate change is extremely serious and not to be ignored any longer – he offered his solution:
I believe the best way to do it is through legislation that places a market-based cap on these kinds of emissions. And today, key members of my administration are testifying in Congress on a bill that seeks to enact exactly this kind of market-based approach. My hope is that this will be the vehicle through which we put this policy in effect.
And here's how a market-based cap would work: We'd set a cap, a ceiling, on all the carbon dioxide and other greenhouse gases that our economy is allowed to produce in total, combining the emissions from cars and trucks, coal-fired power plants, energy-intensive industries, all sources.
And by setting an overall cap, carbon pollution becomes like a commodity. It places a value on a limited resource, and that is the ability to pollute. And to determine that value, just like any other traded commodity, we'd create a market where companies could buy and sell the right to produce a certain amount of carbon pollution. And in this way, every company can determine for itself whether it makes sense to spend the money to become cleaner or more efficient, or to spend the money on a certain amount of allowable pollution.
Over time, as the cap on greenhouse gases is lowered, the commodity becomes scarcer -- and the price goes up. And year by year, companies and consumers would have greater incentive to invest in clean energy and energy efficiency as the price of the status quo became more expensive.
What this does is it makes wind power more economical, makes solar power more economical. Clean energy all becomes more economical. And by closing the carbon loophole through this kind of market-based cap, we can address in a systematic way all the facets of the energy crisis: We lower our dependence on foreign oil, we reduce our use of fossil fuels, we promote new industries right here in America. We set up the right incentives so that everybody is moving in the same direction towards energy independence.
As he often does he closed on a hopeful note, reminding the audience that no problem can be solved by government alone, and expressing his faith that in the spirit of Earth Day Americans will also take responsibility on themselves. He discarded the argument that Washington is simply too intractable to address problems of this magnitude, as well as "the even more dangerous idea" that there simply is no solution:
I reject that argument. I reject it because of what you're doing right here at Trinity; what's happening right here in Newton after folks have gone through hard times. I reject it because of what I've seen across this country, in all the eyes of the people that I've met, in the stories that I've heard, in the factories I've visited, in the places where I've seen the future being pieced together -- test by test, trial by trial.
© April 22, 2009 The White House
