The correct way to evaluate President Obama’s budget proposal is illustrated by this line from Jake Tapper of ABC News: It is “a 10-year budget plan that would increase the national debt by $7.2 trillion over 10 years.”
Yes, Tapper goes on to say that this total is “$1.1 trillion less than if [Obama's budget] weren’t implemented.” That $1.1 trillion figure is the one you’ve probably seen atop virtually all other reports on the budget proposal.
But the $7.2 trillion over 10 years figure is the one that matters. The supposedly higher starting point is inflated — and the White House’s projections already include raising taxes on “the rich” after 2012, so don’t try to tell us that’s the problem here. The key point is that there is no requirement for Washington to run a deficit in any of the next 10 years, much less average $720 billion in annual borrowed spending over the coming decade.
In fact, the smallest projected deficit in Obama’s proposal — $607 billion in fiscal 2015 — would be larger, in inflation-adjusted dollars, than any deficit between 1940 and 2008.
As a percentage of the economy, the deficit in the best year (2018) would be at 2.9 percent of gross domestic product — even George W. Bush did better than that in half of his eight budgets. As The Atlantic’s Megan McArdle observes of the 2.9 percent figure, “when that’s the best you can do — when you’re only getting that low at the tip-top of the business/tax cycle — you’re in deep trouble. What happens when there’s another slowdown?”
Reducing the debt by $1.1 trillion would be, as Vice President Biden might put it, a big bleepin’ deal. So would a plan to take us from trillion-dollar deficits to balanced budgets — although we surely could accomplish the latter in less than 10 years. But Obama isn’t proposing either of those things.
Only in Washington does planning to borrow $7.2 trillion and then saying, “Hey, it could have been worse!” count as “deficit reduction.”
– By Kyle Wingfield
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