It’s not unusual for a budget submission from a president to be declared “dead on arrival,” especially from members of the opposition party in Congress. But it is unusual for the president to join his opponents in proclaiming the early demise of his own, months-long handiwork to establish priorities.
But that’s essentially what the president did at his press conference yesterday. Under repeated questioning about the lack of leadership his budget betrays, the president essentially said, “don’t take it too seriously.”
It’s hard to blame him for walking away from what is plainly indefensible. It’s not a serious plan, even as measured by his own numbers. But, as Brian Riedl of the Heritage Foundation has explained, it’s far worse than even those numbers indicate because so much of what is in the budget is phony.
Starting with the bottom line, according to the administration’s own numbers, the 2012 budget would push debt (held by the public, not government trust funds) up to nearly $12 trillion at the end of 2012. That’s up from $5.8 trillion at the end of 2008. So the federal government will have borrowed as much during President Obama’s four-year term in office as it had during the previous two-century-plus history since the Republic was founded in 1789.
And that’s before the entitlement spending explosion associated with the baby boom retirement hits with full force. Over the coming decade, spending on Social Security, Medicare, Medicaid, and Obamacare’s new entitlements will soar, from $1.6 trillion in 2011 to $3.0 trillion in 2021, according to the Congressional Budget Office.
With the costs of entitlements rising rapidly, what does the Obama budget plan to do to head off a crisis? Nothing. As a result, by their own numbers, the budget would run deficits of $7.2 trillion over the next ten years, pushing the nation’s accumulated debt to an astounding $19 trillion in 2021, or nearly 80 percent of GDP.
And that’s the rosy scenario based on the administration’s numerous gimmicks. Among other things, those numbers assume — as noted by the Committee for a Responsible Federal Budget — $315 billion in unspecified “offsets” to pay for higher Medicare physician fees; $1 trillion in “spending cuts” from plugging $50 billion per year in 2013 and beyond for war funding (down from $165 billion in 2011); and $328 billion from unspecified “bipartisan financing” for highway spending the president says is so critical to “winning the future.” Further, the administration’s economic and technical assumptions make the deficit look about $1.5 trillion less than what CBO expects over the coming decade. Take these gimmicks out of the budget, and the cumulative ten-year deficit exceeds $10 trillion, or about $1 trillion each and every year for as far the eye can see.
The president says his budget doesn’t really matter much because he is serious about working with Republicans on entitlement and tax reform. But why should they believe him? Despite what the president said, budgets do matter. They signal priorities and either lay the groundwork for compromise — or don’t — by what they include. If the president really wanted to work toward a bipartisan deal on the budget, his submission to Congress would have looked very different, with the inclusion of pro-growth tax proposals and market-oriented efforts to slow the growth of rising health costs. Instead, what he submitted is a thinly disguised plan to force, by delay and neglect, a massive tax increase to avoid fiscal meltdown.
