Obama’s budget punt

The president released his 2012 budget proposal this week. The document weighs 44 lbs. Its appendix is larger than the actual bill, and if it were a salad, it would cost roughly $88 at the White House cafeteria. But the laws on that multitude of heavy paper spend much more than that.

Still, this year the president tried to cut spending in response to a Republican House of Representatives. But some of the much-lauded savings result from shady number crunching and phantom accounting—such as counting as savings money that would have been spent in Iraq after an already-proposed draw down in military operations there.

On the other side of the aisle, Republicans have so far only produced a fraction of the $100 billion in budget cuts they had promised.

What lies beneath both these flawed approaches are the particular horrors of compound interest. As our national debt increases, it will do so at an increasing rate. The interest added at the end of every period simply sods on with the principal in order to calculate the next round of interest. The president is advertising that his budget proposes a path of paying down the principal of our debt by 2017. But the interest is still into the hundred of billions of dollars. That is monstrous.

Both parties need to come together like adults and finally tackle the massive entitlements built into our fiscal policy. We cannot finance a far-reaching recovery by simply drawing down on discretionary spending, only 12 percent of the budget. That is not the stuff of which a strong American century can be made. It is time to renegotiate the social safety net. Because with 9 percent unemployment it does not feel so safe to us.