February 17 2011
Christie: Fiscal Leader in Word and in Deed
Governor Chris Christie is doing great things in New Jersey, and setting an example that President Obama should follow. Christie was here in D.C. yesterday, speaking about "fiscal sanity" to a packed room at the American Enterprise Institute.
Diana Furchtgott-Roth of the Hudson Institute wrote about the event for RealClearMarkets.com, commenting on Christie's success in NJ:
Christie, working with a Democratic legislature, cut spending by $1 billion shortly after he assumed office last year, and kept spending flat in fiscal year 2011. Although he didn't raise tax rates, tax receipts for the first six months of the fiscal year are coming in 4.5% higher than predicted, according to the New Jersey Department of the Treasury.
Measured by the Christie standard, President Obama's $3.7 billion budget request for fiscal year 2012, which will begin October 1, fails. It results in a $1.1 trillion deficit in 2012, down from the $1.6 billion gap the president projected for 2011. It suggests few cuts in discretionary spending and does not propose any cuts in entitlements, notably Medicare, the most worrisome driver of federal spending.
Borrowing to fund the deficits would drive debt held by the public, $5.8 trillion in 2008, to double by 2012 and triple by 2019.
With deficit numbers this big (trillions upon trillions!), no one can ignore that this is a crisis. Lately in Washington, though, it seems like both parties are desperately trying to convince the public that they care. Even President Obama has talked about how important it is to cut spending. But as IWF scholars have already pointed out, his budget proposal speaks louder than his sweet speeches. And his budget shows he is not serious about cutting spending.
From the Republican side, leaders like Paul Ryan have pointed out that the President's failure to get serious about spending is tantamount to an "abdication of leadership," and so therefore now the challenge that stands before the country is this: Who will lead in cutting spending?
President Obama has framed the debate about spending cuts as a debate about "tough decisions." Listen, I know being President of the United States is not an easy job. I don't envy him! But he did volunteer for this job at a very difficult time in our nation's history. The real fiscal crisis is that we have a man in the White House who sees government spending as the road to prosperity. I'm sure he thinks that cutting spending is "tough," because in his philosophy cutting spending equals cutting down our American prosperity. It means poor people in the Northeast will lose energy subsidies and will be cold throughout the winter, or it means women, infants, and children will lose funding for their food and nutrition. These are terrible thoughts. It's images like these that the left will rely on to continue to argue for more out-of-control spending.
The House of Representatives, under new Republican leadership, has proposed a 2011 "continuing resolution" that would be $61 billion below 2010 spending, and $100 billion below the level requested by Obama a year ago in his 2011 budget request.
This new "continuing resolution" is a catch-all appropriation in lieu of the 12 separate money bills that the Congress traditionally, but not always, passes. For 2011, Congress sent not one of the twelve to the president and has kept the government running with short-term continuing resolutions, the latest of which expires March 4.
To keep the government funded and running beyond March 4, the Republican House and the Democratic Senate must write a compromise resolution that the president would sign.
The White House budget office said the other day that Obama would veto the Republican bill now on the House floor, knowing that the necessity for compromise with the Senate would prevent that bill from reaching the president's desk.
It's a good guess that whatever the president's Democratic colleagues in the Senate accept in House-Senate conference (after backstage consultation with the White House), Obama will sign.
Writing a new continuing resolution for 2011 gives the politicians, both the president and Congress, and opportunity to put their budget scalpels where their mouths are and make significant cuts.
This is not the much ballyhooed House Republican budget for 2012 in which conservatives hope to slash outlays even further. That GOP spending plan, an alternative to the president's, will be published in the coming weeks. By law, Congress has to submit a budget resolution by April 15-although the deadline often slips, and in 2011 Congress never submitted it.
As for the remainder of 2011, Republicans' proposed $62 billion cuts (from 2010 levels) include $5 billion from agriculture, $14 billion from defense, $24 billion from the Labor Department, $4 billion from the Environmental Protection Agency, $16 billion from transportation. Saving that much money from March 4 to September 30 would be a significant retrenchment, apart from entitlements.
But remember, the White House wants to equate spending cuts to hard-heartedness. They want to point to fiscal conservatives as the guilty party for helpless, homeless, hurting people everywhere. It's politically rough terrain to talk about defunding social programs that exist as part of the American "safety net." As Gov. Christie pointed out yesterday, the real problem with America's budget are the looming unfunded liabilities of Social Security, Medicare, and Medicaid. Our choice is clear when it comes to these entitlements: reform or ruin.
Christie, like other fiscal conservatives, realizes that the road to prosperity does not rely on massive government spending. Instead, the relationship is inverted. The more government spends, the less Americans and their families have. The more government spends, the more insane our deficits become.
Yet, in New Jersey, a Democratic state, Christie's approval ratings have risen since he proposed cuts in entitlements. Earlier this month, a Quinnipiac University poll found that 52% of New Jersey voters approved of the governor, an increase of 6 points since December.
Christie told his AEI audience that even Jerseyans who dislike particular cuts have acknowledged that he is doing the right thing. "Our chance at greatness is to confront these issues...we will be rewarded for courage," he said.
That's what Republicans and even some Democrats should bet on-that the country as a whole is smart enough to recognize what fiscal sanity requires.