News: Big Government In America

After Spending Binge, White House Says It Will Focus On Deficits

U.S. President Barack Obama plans to announce in next year's State of the Union address that he wants to focus extensively on cutting the federal deficit in 2010 – and will downplay other new domestic spending beyond jobs programs. The liberal Democratic president's plan, which the officials said was under discussion before this month’s Democratic election setbacks, represents both a practical and a political calculation by this White House. President Obama has spent more money on new programs in nine months than President Bill Clinton did in eight years, pushing the annual deficit to $1.4 trillion - concerning moderate Democrats running for re-election and independent voters.

The Wall Street Journal reported yesterday that the White House is considering applying some money from the $700 billion financial bailout bill to deficit reduction, and that Cabinet agencies have been asked to submit two budget plans for next year, one that freezes spending at existing levels and one that trims spending by 5 percent. Congress has long history of taking those requests and piling on money for programs it favors. The only way that President Obama can prevent Congress from imposing its will – a tactic he has been reluctant to do during his presidency – would be to threaten vetoes.

Bush Warns Of Too Much Government

Former President George W. Bush said yesterday in a speech at Southern Methodist University in Dallas that America must resist the "temptation" to allow the government to take over the private sector, taking a subtle shot at his liberal Democratic successor by warning that too much state intervention and protectionism will squelch the economic recovery (hat tip: Black & Right). As the Obama administration has made far-reaching moves into the auto, real estate, health care and financial sectors to fight the economic recession, Mr. Bush, without mentioning the president by name, said, "The role of government is not to create wealth but to create the conditions that allow entrepreneurs and innovators to thrive. He added, "As the world recovers, we will face a temptation to replace the risk-and-reward model of the private sector with the blunt instruments of government spending and control. History shows that the greater threat to prosperity is not too little government involvement, but too much."

Obama administration officials have defended many of their economic moves as emergency measures to deal with the economy they inherited from Mr. Bush. They note that some of the most intrusive policies -- including the $700 billion Wall Street bailout -- were instituted under Mr. Bush's watch. At SMU, the future home to the George W. Bush Presidential Center, the conservative Republican former president sought to explain his decision to have the government intervene at the peak of the financial crisis last fall, a decision he called "one of the most difficult of my presidency." "I went against my free-market instincts and approved a temporary government intervention to unfreeze credit and prevent a global financial catastrophe," he said.