THE OBVIOUS DEFICIT-CLOSERS

By DICK MORRIS & EILEEN MCGANN


Published in the New York Post on February 5, 2010


As he tells us he wants to reduce the dangerous budget deficit,
President
Obama brings to mind the hapless engineers at Toyota who find that
their
vehicles accelerate whether or not the driver wants them to. It
appears
that no matter how hard Obama jams on the brakes with his newfound
commitment to deficit reduction (after almost doubling the deficit in
one
year), the level of red ink just seems inexorably to rise. The House
voted
yesterday to raise the federal debt limit another $1.9 trillion.


Obviously, more fundamental change in the budget's engineering is
needed.
But, unfortunately, it is easier to recall a car than a president.


Obama's announced intention to freeze 13 percent of the budget for
three
years is a relatively minor cut. It will trim the deficit by only 3
percent over the decade.


But if the president really wanted to get serious about reducing the
deficit, he's got two easy steps to take:


1) Stop the remaining $500 billion of last year's $800 billion
stimulus
package.


2) Refund to the Treasury the $500 billion in TARP funds repaid by
the
banks.


Instead, he's merrily spending the remaining stimulus cash -- even
though
the first round failed to curb the recession, doing little more than
protecting the jobs and pay of state and local government employees.
The
remaining money would do more of the same -- while also funding
pork-barrel projects all over America.


But only $300 billion of the stimulus has been spent. Why not call
back
the remaining $500 billion? Because Obama is still committed to the
expansion of government spending. His promise of a (minor) freeze
next
year brings to mind an overweight friend's talk of the diet he'll go
on --
even as he starts another banana split.


Then there's the TARP funds. Most of the money laid out under
President
George W. Bush is being repaid by the banks that borrowed it -- but
Obama
is intent on intercepting the cash before it lands in the Treasury
and
sending it out the door again.


He wants these funds for his second stimulus, relabeled as a "jobs
bill."
Some $30 billion is to go to small businesses for job creation, $30
billion for consumer credit and yet another $100 billion for more
state
and local aid -- that is, more protection for government workers.


And none of that cash will ever come back -- even though it's TARP
money
that was initially appropriated for short-term lending, spending that
the
government would quickly recoup.


When will the president learn that deficit spending isn't the way to
stimulate the economy? That by adding to the deficit, he is stopping
business from borrowing to create jobs and blocking consumers from
getting
the capital they need to make purchases?


Treasury debt is up 41 percent over the last year, while commercial
and
consumer lending is down by more than 20 percent: The government is
hogging the loan window. Doesn't the president realize that this is
blocking, not catalyzing, job creation?