Budget Bunk

America is facing a fiscal crisis of the first order.  Our national debt is spiraling to unprecedented and unsustainable levels. 

Earlier this month, the White House predicted that the federal government will spend nearly $4 trillion this year. Meanwhile, it will collect barely $2 trillion in revenues.

After two years of profligate spending and a stunning rebuke at the polls, President Obama tried to create the impression during his State of the Union address that he was reevaluating the unchecked spending habits of his first two years in office:

“But now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in.  That is not sustainable.  Every day, families sacrifice to live within their means.  They deserve a government that does the same.”

Unfortunately, the President quickly proved these were just empty words.  The 2012 budget proposed by the White House is a totally unserious and insulting continuation of the reckless big spending policies of Obama’s first two years in office.

Obama Can Talk the Talk, But He Can’t Walk the Walk

The talk from the White House sounds fiscally responsible, but the actual numbers show this administration is still in denial about our debt crisis.

The President plans on adding nearly $5 trillion more to the debt held by the American public between now and 2016, bringing the total that we owe to creditors to over $15 trillion dollars.

(For a bit of context, in 1999, the last year I was Speaker, the publicly-held debt was only $3.6 trillion, and we were in the process of paying down nearly $500 billion of our debt by balancing four consecutive budgets. The projected deficit in 2011 is nearly as large as ALL federal spending in 1999.)

Nevertheless, in the press conference where he revealed his budget, the President tried to recast himself as a diligent custodian of the country’s fiscal house. He told reporters:

“What my budget does is to put forward some tough choices, some significant spending cuts, so that by the middle of this decade our annual spending will match our annual revenues.  We will not be adding more to the national debt.  So, to use a — sort of an analogy that families are familiar with, we’re not going to be running up the credit card anymore.”

This posture from the President is fundamentally dishonest.

First, the numbers simply do not add up.

As the President’s own Office of Management and Budget admits, in 2015 – “the middle of our decade”— the federal government will be taking in about $3.6 billion in revenues, but plans on spending $4.2 billion that year.  That’s because on top of new spending, in 2015 alone, we will be paying $494 billion in interest on our debt. That means that nearly 12% of all spending, more than half of what we will spend on all national security, will go just towards paying off our creditors. Much of this interest is owed on the roughly $3 trillion in debt that the President has already incurred in only 25 months in office.

Furthermore, Obama’s own budget projections show that by 2021 the annual deficit will start growing again, to nearly $800 billion.

(To see how much Barack Obama plans to borrow and spend every year between now and 2021, check out Table S-1 on the White House’s budget proposal here.)

Obama’s “New Normal”

Second, many of the President’s supporters have hyped the contention that this budget will aim to cut $1.1 trillion from the deficit over the next decade.  This is technically true, but completely misses the point.

Federal spending jumped almost 18% between 2008 and 2009 thanks to the bank bailouts and stimulus.  These programs were intended to be a one-time emergency jumpstart in 2009, then spending was supposed to return to more modest levels in the following years.

Instead, President Obama and his allies are treating 2009 as the “new normal,” and grown spending from that baseline ever since.

Thus, these “cuts” are merely small reductions from a grossly inflated baseline. Although spending will actually drop in 2012 over 2011, it is still up a staggering 25% since 2008. The month that President Obama took office, the non-partisan Congressional Budget Office predicted that spending would be $3.39 trillion in 2012. Barack Obama now proposes to spend $3.72 trillion in 2012.

The President is trying to talk the talk of a fiscal hawk.  But his budget shows he has no intention of walking the walk.

Look to the States for Leadership

If Americans want to find spending restraint in 2011, they should be looking to state capitols. 
Conservatives have rightly cheered the heroic efforts of Chris Christie in New Jersey and Scott Walker in Wisconsin as they have taken on the entrenched interests in their states that are the source of all this excessive spending. 

Today I want to highlight two other governors you may not expect.

Although I’ve previously criticized the spendthrift practices in Albany and Sacramento in this newsletter, today I would like to praise the encouraging initial efforts of two governors – both Democrats – who have just assumed office in those state capitols.

New California governor Jerry Brown and new New York State governor Andrew Cuomo both gave sobering addresses when unveiling their first budgets, but, unlike Obama, proposed spending cuts to match their rhetoric.

Brown proposes to reduce spending in California’s General Fund 8.2% in fiscal 2012. Cuomo’s budget reduces spending from all government funds by 2.7% for the coming year. 

As a comparison, if Barack Obama had followed Gov. Brown’s example and cut 8.2% out of the federal budget for 2012, this would have meant a $313 billion reduction in spending, as opposed to a  mere $90 billion drop off of Obama’s already inflated 2011 numbers.

It will be interesting to watch how these budget proposals from two Democratic governors are received by all the interest groups that elected them.  Conservatives in these states may find themselves in the interesting situation of supporting their Democratic governors against left-wing attacks as they attempt to deal with the reality of their bloated, unsustainable budgets.

Time for a Balanced Budget Amendment

Why have governors, both Republican and Democrat, confronted the need to control spending with appropriate earnestness, while the federal government continues to act as if there is no budget crisis?

A big factor is that nearly every state has a constitutional requirement to balance their budget.
The federal government has no such requirement. 

We proposed a Balanced Budget Amendment in the Contract with America and came within a single vote of passing it in 1995. We then decided to proceed as if we had passed the amendment and fought with the White House for months to insist on a balanced budget.  (You can read my recent op-ed on the many myths of the 1995 government shutdown here.)

The result was four straight balanced budgets and paying off almost $500 billion in federal debt.

Unfortunately, the will to continue to insist on a balanced budget wore off, proving that the only long term fix for Washington’s profligate spending is a constitutional requirement to balance the budget.

A Balanced Budget Amendment would require the federal government to live within its means. It would make it constitutionally impossible for the President and Congress to rack up deficit after deficit, knowing that they will be long out of office by the time its effects are felt.

At ReAL Action Network, we have been working with BBANow (Balanced Budget Amendment Now), to marshal the forces necessary to pass a balanced budget amendment.

I encourage you to visit to find out how you can help.

March Charity of the Month: Girl Scouts of the USA
by Newt and Callista Gingrich

“Do well your part today. The work of today is the history of tomorrow, and we are its makers.” Juliette Gordon Low

In honor of Women’s History Month, we are pleased to recognize Girl Scouts of the USA as Charity of the Month this March. 

Nearly a hundred years ago, Juliette “Daisy” Gordon Low understood the need to mentor and encourage girls to embrace their talents and make their own mark on the world; she believed all girls should have the opportunity to develop themselves physically, mentally, and spiritually. On March 12, 1912 she convened 18 girls in Savannah, Georgia for the first local Girl Scout meeting, spawning a world-wide movement of girls and adult volunteers working towards self-development and community engagement.

Since its founding in 1912, Girl Scouts of the USA (GSUSA) has become the premiere leadership experience for girls. While Girl Scout activities have changed, the values of Girl Scouting are as relevant today as they were nearly a hundred years ago. The organization continues to develop girls’ values, skills, and global-awareness, helping them to grow individually, to engage in a multiethnic world, to make a positive difference in their own community, and to actively forge a successful future for themselves and others. 

Their signature fundraising event, the Girl Scout Cookie Program, is the largest girl-led business in the country, raising approximately $715 million in revenues. The Cookie Program teaches Girl Scouts life skills, including goal setting, decision making, money management, people skills, and business ethics.

Today, 2.3 million girls in the United States, from kindergarten to high school, participate in Girl Scouts, composing part of a world-wide family of 10 million Girl Scouts and Girl Guides across 145 countries. GSUSA has a total of 3.2 million members including adult volunteers.

Furthermore, nearly 50 million women in the United States were Girl Scouts at one point in their life, and 82% of high achieving Girl Scout alumnae believe Girl Scouting positively influenced their personal and professional success.

Girl Scouts underscores the importance of respect and responsibility; of honing a girl’s courage, strength, and honesty; and of providing experiences for girls to develop caring, helpful dispositions in their interactions with others. 

Girl Scouts of the USA puts a strong emphasis on academics – especially enhancing financial literacy skills and encouraging exploration in math, science, and technology – encouraging Girl Scouts to develop an early appreciation for academic excellence and lifelong learning.

The Gingrich Family has been a proud participant in the Girl Scouts organization. Throughout grade school and high school, Callista worked her way up the Girl Scout ranks as a member of the Riverland Girl Scout Council in Wisconsin. Newt served on the board of the Pine Valley Girl Scout Council, and his mother was a dedicated Girl Scout executive in her day. In addition, Newt’s two daughters, Kathy and Jackie, were both involved in Girl Scouts, and his granddaughter, Maggie, is an active Junior Girl Scout in Georgia. Given our family’s experiences and our understanding of the world’s need for strong female leaders of integrity, responsibility, and drive, we deeply believe in the mission of the Girl Scouts and in the positive values the Girl Scouting experience provides to girls of all ages. 

March is Women’s History Month and the 99th anniversary of the Girl Scouts’ founding. Help Girl Scouts of the USA continue their mission of building girls of courage, confidence, and character who make the world a better place. We encourage you to explore some of the flexible opportunities GSUSA offers to volunteer your time.  Do your part to make a promising future possible for young girls in your own community. Please join us in donating to The Girl Scouts of the USA.

Your friends,

Newt and Callista Gingrich

P.S. My friend Barry Casselman writes an excellent newsletter every week.  This week he asks some fresh questions about the 2012 elections that have not yet been considered.  There is a free preview on his site. Click here.

Newt’s Quick Links

  • In his piece posted on Renewing American Leadership, Dr. Jim Garlow weighs in with a “parent’s view” of DOMA and the Wisconsin State Senators.
  • At ReAL Action, learn about the Muslim cleric in favor of Sharia law who plans to hold a protest at the White House on March 3.