Barack Obama rolls out his new budget today, one that includes a $1.39 trillion on-budget deficit in the fourth budget year of his presidency despite an election-campaign pledge to cut deficits in half by this time. The FY2008 budget, the last one signed by a President other than Barack Obama, had a projected deficit of $239 billion and an actual deficit of $641 billion, just for comparative purposes. Even if we don’t give Obama credit for the FY2009 budget which Democrats refused to pass while George Bush remained in the White House and completed in an omnibus bill signed by Obama in March 2009, that actual FY2009 on-budget deficit was almost $1.6 trillion, which makes this new budget proposal a decline in annual deficits only a 13% decline over his own first budget, and a 117% increase over George Bush’s last signed on-budget deficit.
CNN naturally predicts a lot of “finger-pointing” when it comes to assigning blame for this situation:
When President Barack Obama rolls out his 2013 budget proposal Monday, it’s likely to unleash another round of political finger-pointing on Capitol Hill.
The White House bills the document as a “blueprint for how we can rebuild an economy where hard work pays off and responsibility is rewarded.”
While the White House and Democrats are advocating a balanced approach to economic growth — including spending cuts, increased tax revenue and investments in rebuilding infrastructure such as highways and bridges, Republicans will argue for deeper spending cuts and lower tax rates.
“Balanced”? Ahem. Obama promised to reduce the deficit by half in four years during the 2008 campaign. What are the projections from the White House on budget deficits, even with all of the tax hikes they want included in the calculations?
The Obama budget proposal will project that the deficit for fiscal year 2012 will top $1.3 trillion, before falling in 2013 to $901 billion, or 5.5% of gross domestic product.
By 2022, the deficit is forecast to fall to $704 billion, or 2.8% of GDP, according to the White House.
The FY2013 projection for the deficit will still be a 38% increase over the annual deficit from Bush’s last signed budget. The FY2022 figure is still an 8.5% increase over FY2008’s budget deficit. And those only take place if Obama’s ruinous tax hikes manage to still produce economic growth, an assertion that the CBO found laughable a couple of weeks ago.
One House Democrat doesn’t feel terribly enthused by this budget or its assumptions of economic growth, calling it “a nervous breakdown on paper,” although his complaint is that it spends too little (via JWF):
This budget is a nervous breakdown on paper. And it’s not just President Obama. I think he’s put together a document that addresses education. We need to do it. Community colleges need to be upgraded. We got to have training for real jobs. We’ve got a lot of jobs that are going unfilled because we don’t have the technology in the heads of graduating college students to deal with them. …
We are still in a recession. We’re still struggling. Unemployment is still too high in every major city in the country. People are struggling. So for the federal government to turn the spigot off completely I think is to push the nation into a deeper economy. That’s not just me talking. Some of the top economists in the nation have said the same thing.
Some of the top economists might want to weigh in on how a budget that hikes taxes on business will grow “a deeper economy”:
President Barack Obama’s 2013 budget proposal, released on Monday, calls for raising hundreds of billions of dollars from U.S.-based global companies, while ending cherished deductions and tax breaks for oil companies and other big firms.
Resembling previous proposals from the White House, the latest plan renews Obama’s focus on raising taxes on the wealthy and reining in corporate tax avoidance.
But the plan is seen largely as a campaign document that looks ahead to Obama’s re-election challenge in November, with little chance of winning congressional approval.
Senate Minority Leader Mitch McConnell plans to take the “campaign document” and force Democrats to give it their endorsement — or rejection:
Senate Minority Leader Mitch McConnell said he is so confident that Democrats will not support President Obama’s budget, he plans to introduce the bill himself.
With Obama set to release his 2013 budget Monday, the Kentucky Republican said he will do the same thing he did last year when the Senate was trying to pass a budget.
“I offered President Obama’s budget, since the Democrats didn’t seem to want to develop their own budget and didn’t want to vote for his. His budget was defeated 97 to nothing,” McConnell said on CBS’s “Face the Nation.”
I suspect the President will improve his performance by about 20 votes — none of whom will be Democrats facing voters in November.