Big Government Returns With Vengeance

The say one thing, do another approach of the Obama administration requires ever increasing use of sleight of hand magic. However it is very difficult to hide the fact that Largest-ever federal payroll will hit 2.15 million.

The era of big government has returned with a vengeance, in the form of the largest federal work force in modern history.

The Obama administration says the government will grow to 2.15 million employees this year, topping 2 million for the first time since President Clinton declared that "the era of big government is over" and joined forces with a Republican-led Congress in the 1990s to pare back the federal work force.

"I'm shocked that the 'tea party' hasn't focused on it yet, and the Obama administration only has a thin sliver of time to deal more directly with it, I believe," said Paul C. Light, who studies the federal bureaucracy as a senior fellow at the Brookings Institution and a professor at New York University. "When you talk about big government, you're talking about a big employer."

From 1981 through 2008, the civilian work force remained at about 1.1 million to 1.2 million, with a low of 1.07 million in 1986 and a high of more than 1.2 million in 1993 and in 2008. In 2009, the number jumped to 1.28 million.

Including both the civilian and defense sectors, the federal government will employ 2.15 million people in 2010 and 2.11 million in 2011, excluding Postal Service workers.

The administration says 79 percent of the increases in recent years are from departments related to the war on terrorism: Justice, Defense, Homeland Security, State and Veterans Affairs.

Mr. Clinton in 1996 declared that "the era of big government is over" and took steps to work with Congress to control spending and cut the work force, which already had been trending lower.

As he left office in 2000, Mr. Clinton boasted that his administration had helped cut 377,000 government jobs, leaving the smallest civilian federal work force since 1960.

Mr. Obama, though, appears to be accepting a larger federal work force.

The administration has called for federal workers to get a 1.4 percent pay raise next year, which Peter Orszag, [Obama's budget director] said, "frankly, I think to a lot of Americans, sounds pretty good."

The American Federation of Government Employees, the union that represents many government workers, said it was combing through the budget and did not have a comment.

Sleight Of Hand Magic On Budget Cuts

Inquiring minds are disappointed but not surprised to learn Obama's budget knife takes smaller cuts.

President Obama on Monday failed to heed his vow to take an ever-sharper scalpel to the budget during tough economic times, instead proposing $1 billion less in discretionary spending cuts than last year and ensuring bruising fights over his plans to ax manned spaceflight, pet defense projects and a number of popular parks and forest programs in 2011.

Overall, the president's budget calls for the government to spend $3.83 trillion next year and to run a deficit of about $1.3 trillion, assuming the economy rebounds and tax revenues increase. Mr. Obama predicts federal spending will drop slightly in 2012 to $3.75 trillion before beginning a steady rise to $4.39 trillion by 2015.

The president begged Republicans and Democrats to join an effort to strike a balance between boosting the economy in the short run, while trying to get a handle on deficits over the long term.

"I'm willing to reduce waste in programs I care about, and I'm asking members of Congress to do the same," Mr. Obama said. "I'm asking Republicans and Democrats alike to take a fresh look at programs they've supported in the past to see what's working and what's not, and trim back accordingly."

To hit his spending targets, Mr. Obama is proposing more than $23 billion in specific cuts: $10.3 billion in discretionary programs and the rest coming in mandatory spending cuts and administrative savings.

But those discretionary spending cuts are $1.2 billion less than the $11.5 billion he proposed last year, disappointing budget scorekeepers who had hoped for more cuts.

"This year's cuts seem no more ambitious, and in fact seem a little less ambitious, which is not what I would have hoped," said Marc Goldwein, policy director at the Committee for a Responsible Federal Budget. "Having proposed a non-security discretionary spending freeze for three years, I would have thought the administration would be a little more aggressive in cutting real waste to meet that freeze."

Although Mr. Obama's budget projects a deficit of $752 billion in 2015, the White House is counting on a proposed fiscal commission to find a way to balance the budget - excluding debt interest payments - by that time. That means shaving nearly 1 percent of their projected deficit, which amounts to 3.9 percent of the economy, to 3 percent, Mr. Orszag said.

Just one week after the Senate killed a legislative version of the bipartisan commission, officials wouldn't speculate as to how the yet-to-be-created panel - whose recommendations would be nonbinding - would accomplish the feat. Mr. Orszag said the White House has made clear its preference not to raise taxes on middle-income earners.

It is ludicrous to preach "budget cuts" while proposing the biggest budget deficit in history. Obama takes a scalpel to the tiniest of projects for mere millions of dollars when he should wield the axe on military and entitlement spending to the tune of hundreds of billions of dollars.

To pay for this extravagance, taxes must rise and small businesses are getting hammered as a result. I would like to hope that mid-term elections will solve something, but for all their blustering, Republicans cannot step up to the plate either and make the necessary cuts.

Sadly, belief in the "free lunch" theory of economics runs deep on both sides of the aisle. The only difference is in the nature of the pet projects and earmarks.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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