Debt, deficits get ignored in Obama’s final budget plan
REVIEW BY CONGRESSIONAL BUDGET OFFICE
THE Obama presidency has been notable for extravagant spending, record deficits and exploding debt with nothing to show for it but anemic, lackluster economic growth. The Congressional Budget Office’s recent review of President Barack Obama’s final budget proposal shows he wants to close out his presidency with more of the same.
Under Obama’s budget, the debt held by the public would fall slightly, from 75.4 percent of gross domestic product in 2016 to 74.1 percent in 2018. But then the debt would surge again to 77.4 percent of GDP by 2026. And Obama achieves that slight, temporary reduction only by relying on a host of tax increases that are politically untenable, including a new tax on oil during a price slump.
In fact, the president wants to impose $2.6 trillion in new taxes on the U.S. economy without achieving that amount in deficit reduction because he would use some of the money for new spending. That appears a triumph of ideological obsession over reality. It’s not like Obama hasn’t tried to tax-and-spend his way to U.S. prosperity for the better part of two terms now, without success.
Obama’s budget shows he has no inclination to actually get debt or deficits under control. Indeed, the CBO projects deficits would total $6.9 trillion over the next decade under Obama’s budget plan.
In the short term, Obama’s plan would reduce the annual deficit from $529 billion in 2016 to $383 billion in 2018. But the CBO projects the deficit would then rise nearly continuously to $972 billion by 2026.
Keep in mind, the first trillion-dollar federal budget plan was submitted to Congress in 1987. Under Obama, the annual deficit exceeded that amount and he wants to put the nation on a path to seeing such deficits again.
And Obama would achieve this dubious distinction while setting taxes far above historical norms. Over the last half-century, tax revenue has averaged 17.4 percent of GDP, according to the CBO. Under Obama’s final budget plan, it would hit 19.3 percent.
In dollar terms, debt would rise from $13.9 trillion to $21.4 trillion by 2026.
So Americans would see the federal government seize far more of their hard-earned cash without seeing any reduction in national debt. There are people who are bad at math and never balance their checkbooks who still manage to do better.
As the Committee for a Responsible Federal Budget noted in an understatement, Obama “does not go far enough to reduce debt from its current postwar recordhigh level as a share of GDP.”
Committee members particularly criticize his failure to address the financial problems of Social Security, Medicare and Medicaid. Put another way, Obama’s policies don’t even shore up the government programs he claims are vital to Americans.
Perhaps this could be shrugged off if Obama’s economic policies had generated strong economic growth. But they haven’t. Throughout his presidency, middle-class wages have been basically stagnant. While the economy is growing, the pace is sluggish and far below historic norms that facilitate greater prosperity for all. It’s telling that even Democratic presidential candidates decry the Obama economy as a failure.
By now, Republican and Democratic candidates don’t have to promise to generate an economic boom. As things stand, a candidate who promises to provide mediocre results at a lower price would still be an improvement.