Deficit Deceit The Congressional Budget Office released new budget estimates Wednesday predicting that the federal deficit will reach a record of nearly $1.5 trillion this year, or almost 25 percent of GDP. The national debt is fast approaching its current $14.3 trillion ceiling. This grim news came less than 12 hours after Barack Obama tried to sound a note of fiscal responsibility in his State of the Union address1 -- a speech during which the federal debt increased by another $100 million.

Of course, CBO's projections for the next 10 years assume that all of the Bush tax rates, not just those on the "rich," will be repealed in 2013; that 25 million more Americans will be hit with the Alternative Minimum Tax; and that Medicare reimbursement rates to doctors will be cut severely. Plus, because of Democrats' budget gimmickry, CBO still views ObamaCare as a deficit reducer rather than the mammoth entitlement spending that it truly is.

To the contrary, Brian Riedl of the Heritage Foundation calculates that the numbers aren't as bad as we think ... they're worse. "Annual deficits never fall below $1 trillion" over the next 10 years he wrote, "and even that assumes a return to peace and prosperity."

Obama's SOTU response was to push for a "freeze" in non-defense discretionary spending for five years. That sounds serious, but it will save a paltry $26 billion over that time, while his new proposals for "investment" would cost $20 billion each year. Besides, Democrats have also established a new "floor" for federal spending, so this "freeze" means little. Congressional Republicans set out a far better plan -- returning spending to pre-bailout, pre-stimulus levels -- with the Spending Reduction Act of 2011. This is far from perfect, but it's a good start.

The road to fiscal sanity will be difficult. "These cuts will go deep and wide and will hit virtually every agency and every congressional district in this country, including my own," explained House Appropriations Committee Chairman Harold Rogers (R-KY). "Every dollar that we cut will have a constituency, an industry, an association and individual citizens who will disagree with us." That's exactly why Democrats have the easier position to defend.

If the Spending Act cuts seem deep, however, consider newly elected Kentucky Republican Sen. Rand Paul's plan for reducing spending by $500 billion each year. Paul's ambitious plan calls for eliminating, defunding or consolidating the U.S. Departments of Education, Housing and Urban Development, Energy, and other agencies. "Pretty much everything is in it," said Paul. He also knows what he's up against, pointing out that Obama and the Democrats "still see government as a solution to everything."

Paul makes a convincing case: "By rolling back to 2008 levels and eliminating the most wasteful programs, we can still keep 85 percent of our government funding in place. By removing programs that are beyond the constitutional role of the federal government, such as education and housing, we are cutting nearly 40 percent of our projected deficit and removing the big-government bureaucrats who stand in the way of efficiency in our federal government." That's more like it.

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