PrintMarch 3, 2010
President Pinocchio
Just a month after his inauguration, Barack Obama made this pledge of fiscal honesty and accountability in an address to a joint session of Congress.
Finally, because we're also suffering from a deficit of trust, I am committed to restoring a sense of honesty and accountability to our budget.
Under his leadership, he vowed that spending would be accounted for; nothing, especially the price of war, would be hidden.
Unfortunately, that pledge had an undisclosed disclaimer; except spending for quasi-governmental agencies Fannie Mae and Freddie Mac -- detailed yesterday in a CNNMoney.com report.
Mortgage giants Fannie Mae and Freddie Mac are private companies that for years had the implicit backing of the federal government. That backing assured investors that if anything went seriously south for the companies Uncle Sam likely -- although not absolutely -- would step in.Well, things did go south, and now both are run by the federal government.While the implicit guarantee has become explicit for Fannie and Freddie, its treatment in the budget is up in the air."Our budget doesn't have Fannie Mae and Freddie Mac on it, even though it's owned lock, stock and barrel by the American taxpayer," said Rudolph Penner, a former director of the Congressional Budget Office (CBO) during a conference held by the Peterson-Pew Commission on Budget Reform.
Last December, the nation saw an increase in foreclosure filings for the first time in five months. That turn of events led Obama to sign an executive order on Christmas Eve to remove the limit on capital the government could provide for the two agencies, both expecting huge losses for the foreseeable future from the still-deteriorating residential real estate market.
During the month following, the president suddenly became a deficit hawk, concerned about his administration's out of control spending, which has produced record-breaking deficits and national debt. When the Senate declined to answer his call for the formation of a deficit-reduction commission, he decided to form one himself.
However, even while posturing about spending and debt, he was intentionally excluding expenditures on Fannie Mae and Freddie Mac from his budget. Recently, Freddie Mac CEO Charles E. Haldeman, Jr. disclosed the agency's Q4 loss of nearly $8 billion and warned of a "potential large wave of foreclosures" upcoming, which means the quasi-governmental agencies will continue to need more government assistance to cover their losses.
It's incredibly disingenuous of the president to claim to be interested in reducing the nation's annual spending and overall debt while he employs budget trickery to conceal the ever-increasing spending on Fannie Mae and Freddie Mac. Furthermore, he's doing so with full awareness of the caveat that the expenditures are not being accounted for in deficit and debt calculations.
The American people understand that politicians lie, but Barack Obama has taken presidential deceit to another level. He's been dishonest about his motive and ultimate goal for health-care reform, the status of jobs and the economy, and his desire to curtail government spending and the nation's overall debt.
Going forward, can we really trust Barack Obama?
This week, news reports of his first presidential medical examination detailed his doctors' recommendations to quit smoking and moderate his alcohol intake.
I hope they also informed him his nose is getting longer as well.
J.C. Arenas is a frequent contributor to American Thinker and welcomes your comments at jcarenas.com
