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Press Release


Study: Despite “Spending Freeze,” State of Union Proposals Cost Taxpayers $70 Billion in Cold Cash

For Immediate Release January 27, 2010
Pete Sepp, (703) 683-5700

 

(Alexandria, VA) -- Even as he encouraged positive reforms like a freeze on a small portion of the federal budget and a more robust disclosure process for Congressional earmarks, President Obama still called for at least $70.46 billion in new federal spending burdens on taxpayers, according to a line-by-line analysis of his first State of the Union speech by the non-partisan National Taxpayers Union Foundation (NTUF).

“Presidents often give laundry lists of proposals designed to please political constituencies in their State of the Union Addresses, and President Obama’s speech was no exception,” said NTUF Senior Policy Analyst Demian Brady, who conducted the study. “But regardless of what’s in the laundry bag, the people left holding the bill for it all are the nation’s taxpayers. While the President should be commended for his newfound support of a spending freeze on one-eighth of the federal budget, Americans won’t be happy to learn that his other proposals would far outweigh any savings the freeze might provide.”

Among the findings of NTUF’s analysis:

  • President Obama outlined items whose enactment would increase federal spending by a net of $70.46 billion per year. Since 1999, when NTUF began tracking Presidential addresses, the lowest recorded total was President Bush’s address in 2006, coming in under $1 billion in new spending; the highest was President Clinton’s 1999 speech, which proposed $305 billion in new outlays. Obama’s speech last night amounted to $36 billion less than the $106 billion that George W. Bush offered in his first State of the Union speech in 2002.
  • Obama outlined 21 proposals with a fiscal impact last night, eight of which would boost spending, three of which would cut them, and 10 of which had costs or savings that could not be pinpointed. The single largest item Obama mentioned was a call to pass cap-and-trade national energy tax legislation, with an outlay cost of $51.5 billion (not including revenue increases or price hikes in energy bills). Other large initiatives included immigration reform ($9.8 billion) and subsidies for retirement savings among low-income Americans. Major undertakings with unquantifiable costs included a student loan forgiveness program and a new round of mortgage refinancing subsidies.
  • President Obama was not able to address all of his planned spending increases in his speech yesterday. Among them were: a $44 billion increase in Defense spending, the largest single-year request for federal funding in education ever (which will include up to $4 billion to reform No Child Left Behind), an increase in NASA spending, and between $7-17 billion in new costs for the Department of Transportation (which does not include an additional $5 billion planned to continue a high speed rail project).

“This analysis doesn’t include huge potential burdens from big-government health care legislation, a new 'stimulus' plan, or greater obligations to bailed out entities like auto companies and banks. While it’s clear we face enormous deficits as far as the eye can see, taxpayers seeking specifics on the President’s future direction of federal expenditures likely won’t find a compass in last night’s speech,” Brady continued. “Next week’s budget blueprint from the White House may fill in some of those blanks, and Congress’s own actions will do the same. Still, many Americans are no doubt hoping that the words of encouragement they’ve heard on addressing excessive government spending will soon transform into deeds,” Brady concluded.

Since 1991, NTUF has tracked the fiscal impact of proposed legislation through BillTally, an accounting database that reports the “net annual agenda cost” for each Member of Congress based on sponsorships and cosponsorships of pending legislation. For this analysis, NTUF matched Obama’s proposals with those in the BillTally system and in White House documents.

NTUF is the research affiliate of the 362,000-member National Taxpayers Union, a non-profit taxpayer advocacy group founded in 1969. Note: For a spreadsheet of cost estimates for Obama’s State of the Union proposals, along with analyses of past Presidential speeches, visit www.ntu.org.

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