President Obama released his fiscal year 2013 budget proposal yesterday. A lot can, and will, be written about it — including writings by me on this blog. For now, just the bottom line:
Accounting for the roughly $200 billion in net deficits attributable to the 2009 “stimulus,” Obama has taken an inherited deficit of $1.21 trillion and borrowed an increasing amount of money in each of the three fiscal years since then:
$1.29 trillion in FY 2010
$1.30 trillion in FY 2011
$1.33 trillion in FY 2012
We are expected to believe that this number would shrink to “just” $900 billion in FY 2013 if Obama’s budget were implemented. Here’s why I say “expected to believe”: All of the reduction comes from higher taxes, and this administration has been very wrong in its revenue estimates before — most recently by about $230 billion this year. This is in largest part because the economy has yet to improve in the way the administration thought it would. And all of this is without even delving into the likelihood that Obama will get the tax increases he wants.
But let’s assume the forecast will turn out to be correct this time. Obama still will have missed — by a wide margin — his pledge to halve the deficit by the end of his first term.
Again, attributing $200 billion in 2009 deficits to his “stimulus,” his rosy scenario would have the deficit down by just 26 percent (32 percent in inflation-adjusted terms; 37 percent as a share of gross domestic product). Each of those numbers is a long way from 50 percent.
If reality next year turns out to be more like the last three years, however, we will be talking about single-digit increases in absolute terms (inflation-adjusted or not) and a 2 to 3 percentage-point drop relative to GDP.
All of this, in spite of rising revenues (no matter how they are measured) every single year of his presidency.
It’s the spending. It will always be the spending with this president.
– By Kyle Wingfield