Earlier this week, President Barack Obama released his budget for 2015. It included proposed budgets for each of the different departments he oversees (and the government on the whole), as well as projections for these budgets and expenditures over the next ten years. This budget promises to “further reduc[e] the deficit and debt,” and to promote fiscal responsibility.
Considering Obama’s less-than-positive track record with regards to fixing our budget and spending problems, you’ll forgive me for not believing those initial claims, especially when the actual numbers from the budget don’t match them.
The projected deficits for each year are certainly smaller than what we’ve seen in the past from this administration — last year we had a $680 billion deficit, and the projections of this year’s budget have that deficit down to $434 billion by 2024.
There are, however, two main problems with those projected deficits.
First, they’re based on projections that are optimistic at best, but border on fantasy. For example, the Congressional Budget Office (a branch of government whose employees are recruited to be simultaneously nonpartisan and good at economics) projects federal revenues to total $40.6 trillion between now and 2024, in comparison to Obama’s budget projection of $43.8 trillion over the same period. That’s a $3 trillion difference, all in Obama’s favor.
The differences in spending is less stark (the Congressional Budget Office’s $48.5 trillion versus Obama’s $48.7 trillion), but the estimates from the Congressional Budget Office don’t take into account any of the new spending programs proposed by Obama’s 2015 budget.
Speaking of spending, that’s the other problem. This budget achieves its mild deficit reduction not by cutting a penny of spending, but by raising taxes. In 2013, the federal government collected $2.8 trillion in taxes. By 2024, based on Obama’s ideal budget, we’ll play almost twice as much in taxes — $5.5 trillion.
This isn’t a tax hike — it’s a tax climbing expedition, and it barely even covers the new spending he’s proposing.
How a budget can call for deficits every single year that add up to a total of $7 trillion in new debt by 2024 (based on those overly optimistic estimates) and still claim to be “fiscally responsible” is beyond me.
If a deal is reached (and I doubt it will — far more likely we’ll continue to operate without a budget), Republicans will likely “compromise” by blocking most of the tax increases while leaving much of the new spending programs intact, further increasing the deficit.
That’s a fine deal for politicians, who will be able to claim that they brought lots of new spending programs without increasing taxes, but a terrible deal for the average taxpayer, who will have to foot the bill for all of this “fiscal responsibility.”