President Obama’s 2013 budget, as I wrote earlier this month, represented one last chance for him to live up to his words before the election. By this I meant not only his pledge to cut the deficit in half, but also his larger vow to make tough choices to confront the nation’s pressing long-term challenges, no matter the politics. With his budget out this morning, we have the final confirmation that Obama is purely focused on gaining short-term political advantage and not at all interested in making tough but necessary choices.
In the run up to this morning’s release of the budget, the White House was touting $4 trillion in deficit reduction. But that number takes credit for over $2 trillion of savings from the deal to raise the debt limit and phony war “savings” (based on the idea that we would have otherwise been fighting at full force in Iraq and Afghanistan in perpetuity). In addition, the budget calls for hundreds of billions in new stimulus spending.
Here's the real deal. In fiscal year 2013 alone, Obama’s budget spends $3.8 trillion, according to the White House Office of Management and Budget, or $230 billion higher than the Congressional Budget Office’s most recent baseline. Overall, the budget proposes $47 trillion in spending in the decade from 2013 through 2022, which is $2.7 trillion higher than the CBO baseline.
Though some of the new spending is offset by raising taxes on those with higher incomes and closing loopholes, Obama preserves most of the Bush era tax cuts.
Overall, the OMB estimates that deficits will be $6.7 trillion over 10 years under Obama’s budget, which is more than double the $3.1 trillion projected by the CBO. Whereas the CBO estimated that public debt would rise to $15.3 trillion by 2022, under Obama’s budget, it would explode to $19.5 trillion.
It’s also worth noting that the White House relies on rosier economic forecasts than the CBO. In 2012 and 2013, the OMB sees growth of 2.7 percent and 3 percent, whereas the CBO has projected 2.2 percent and 1 percent growth during those years. Weaker economic growth hurts the deficit both by reducing revenues and boosting spending on government programs such as unemployment insurance. (Though the CBO baseline assumes that all Bush tax cuts expire starting next year, which hurts the economic forecasts).
To put this in context, Obama’s first budget after coming into office projected that the deficit would be $581 billion this year. Today, the fiscal year 2012 budget is projected at $1.33 trillion.
But his budget is useful in one sense. Even before being evaluated by the CBO, it reinforces the math confronting the nation. Obama refuses to admit that his vision for America would require much more tax revenue, because he doesn’t want to give Republicans an issue during election year. So what we’re left with is a budget that spends more money, makes only modest changes to entitlement programs, and raise taxes on the rich. The results are not surprising.
Obama spent most of last year lecturing the country on how he supported a so-called “balanced approach” on deficit reduction. Time and again, he said he was ready to make real changes to Medicare, Medicaid and Social Security if only Republicans were willing to budge on the revenue side. He repeated this in a lot of speeches and insisted that behind the scenes he was really, really, ready to cut a deal with the GOP during the debt limit talks. But he never presented a tangible plan that could be scored by the CBO and evaluated next to Rep. Paul Ryan’s plan to reform entitlements and put the nation on a sustainable fiscal course. He had his chance with this budget. Instead, Obama decided to forgo tough choices so he could attack Republicans during an election year.