President Obama’s budget is a strikingly dire vision for America’s future. Permanent deficits, massive tax increases, soaring interest costs, and no plan for reform. All told over the next ten years the deficit will average close to $800 billion and the national debt will grow by $7 trillion.
But if all of that wasn’t enough the President has the gall to tell us “this Budget will cut the deficit by $4 trillion over the next decade.”
What he neglects to mention is that 99.9 percent of that claimed deficit reduction consists of tax hikes, phony war savings, already enacted spending reductions, and net interest savings from those policies. That leaves a measly 0.1 percent left in actual new spending cuts.
Let’s take a closer look into those numbers.
On the revenue side, Obama’s budget contains $1.8 trillion in new taxes over the next decade. Among the most egregious are a tax hike on those who make more than $250,000, a tax that would hit a number of small businesses; it would slash a number of deductions and exemptions for things he doesn’t like (mainly those big bad oil companies) while granting new ones to things he does (anything related to green energy); it would raise the capital gains tax to 20 percent; and increase the death tax.
All told, under his budget federal revenues would be projected to reach 20.1 percent of GDP – about 2 percent higher than the post-World War II average. And despite all that new revenue his budget still doesn’t come close to balancing!
The war savings gimmick has been so thoroughly debunked that it’s amazing the President continues to use it. The gist of it is, that the CBO scoring rules assume the wars in Iraq and Afghanistan will continue to be funded at a certain level, even though we all know that they are being wound down and will cost much less. President Obama uses these “savings” to appear to reduce the deficit.
The problem is it’s totally phony. In a metaphor we can all understand, Maya MacGuineas of the Committee for a Responsible Budget,” likens it to a college student graduating with a whole bunch of debt who decides to go on a spending binge because they’re “saving” on college tuition. “When you finish college, you don’t suddenly have thousands of dollars a year to spend elsewhere – in fact, you have to find a way to pay back your loans,” writes MacGuineas.
The president’s budget also takes credit for the savings that resulted from the statutory caps and entitlement cuts that resulted from last summer’s debt limit debate. Apparently Obama has forgotten that Republicans spent months dragging Democrats kicking and screaming toward the idea of deficit reduction. In the end, Republicans were able to secure statutory caps that save $840 billion over ten years and set a trigger that would cut spending by $1.2 trillion over ten.
Not only does Obama’s budget happily take credit for the savings as a result of the cap, but he writes the other savings out of existence. That’s the equivalent of a $1.2 trillion spending increase – but of course Obama doesn’t score it that way. In fact, he ignores it completely, as if the bipartisan agreement never happened.
Finally, he adds up all of those “savings” and calculates that it will lead to lower interest payments over the next ten years…and then takes credit for that as well! That’s not true deficit reduction – it’s adding a gimmick on top of a gimmick!
Senator Rob Portman (R-OH), a former Director of the Office of Management and Budget, has done the math behind these gimmicks and found something astounding. “That leaves very little, about $4 billion out of the $5.3 trillion that is really spending reductions,” Portman said today on the Senate floor. That means 99.9 percent of Obama’s claimed deficit reduction is nothing more than a farce.
This is not the kind of budget we need or can afford. America deserves real solutions, not tricks and gimmicks that seek to sweep Washington’s deficit woes under the rug. Sadly, it’s what we’ve come to expect from President Obama.