Obama’s budget does not cut spending
Defending President Obama’s budget on Meet the Press this Sunday, White House chief of staff Jack Lew claimed, “The president’s budget has $1 of revenue for every $2.50 for spending cuts.” This is just plain false. In fact, Obama’s budget doesn’t have any spending cuts at all.
Obama’s budget does raise taxes. According to his own numbers, Obama hikes taxes by $1.9 trillion over the next ten years. Currently, the federal government consumes 15.8 percent of gross domestic product through taxes. Under Obama’s budget that number will rise to 20.1 percent by 2022.
Moving on to the spending side, however, Obama turns to gimmicks to create the illusion of spending cuts. The biggest of these is almost $850 billion in “savings” from cuts to spending on the wars in Iraq and Afghanistan. Nobody, including the Pentagon, ever requested those funds. Obama’s budget does fix Medicare’s doctor reimbursement shortfall, but only for two years. If Obama had used an honest spending baseline for ten years, as Paul Ryan’s Path to Prosperity does, that would add another $430 billion in spending. Add in some hidden spending on Pell Grants and phantom spending on debt servicing, and Obama’s supposed spending cut turns into a $1.472 trillion spending increase.
The spending hikes are clear when Obama’s budget numbers are compared to the Congressional Budget Office’s annual Budget and Economic Outlook. According to the CBO, federal spending is set to reach a total $44.251 trillion through 2022 under current law. But under Obama’s budget, spending would total $46.959 trillion in spending through 2022. That is a $2.7 trillion spending increase over ten years. For 2012 alone, Obama’s budget increases spending by $195 billion.
Moving to the debt, Obama’s own numbers show that deficits will total $6.7 trillion over 10 years under his budget. That is more than double the $3.1 trillion projected by the CBO. While the CBO estimated that public debt would rise to $15.3 trillion by 2022, under Obama’s budget, it would rise to $19.5 trillion.
It’s also worth noting that the White House uses much more optimistic economic forecasts than the CBO. In 2012 and 2013, the OMB forecasts growth of 2.7 percent and 3 percent of GDP, while the CBO has projected 2.2 percent and 1 percent growth during those years. Weaker economic growth would make Obama’s deficit totals even worse. For example, Obama’s first budget projected that the deficit would be $581 billion this year. Today, the fiscal year 2012 budget is projected at $1.33 trillion.