Analysis of the President’s Budget for FY2013
The President’s budget Increases Spending, Raises Taxes, and Offers No Plan to Lift the Debt
After four budget submissions, the President has failed to use his term to confront the nation’s most pressing fiscal and economic challenges. His fourth budget advances policies that dangerously accelerate the fiscal crisis America faces. His budget fails to reduce the fast-rising debt, permanently entrenches unsustainable levels of government spending, and erects new barriers to upward mobility. His plan stifles economic growth, threatens the health and retirement security of millions of Americans, and commits the next generation to a diminished future.
Spending: President Obama’s budget includes more of the same failed spending policies he has pursued since taking office – policies that would worsen the nation’s fiscal crisis and speed the country to bankruptcy. Three years after the passage of the President’s trillion-dollar spending stimulus, the President is at it again, calling for more wasteful spending taken from workers’ paychecks or borrowed from abroad. The massive spending increases are greater than the few proposed spending reductions, for a net spending increase of $1.5 trillion over ten years.
Taxes: The President’s budget imposes a heavy cost for its commitment to intrusive government – diminishing economic opportunity by imposing the largest tax hike in American history. This budget imposes $1.9 trillion in new taxes and adds new complexities to an already broken tax code.
Deficits: When he first took office, the President promised to cut the deficit in half by the end of his term.1 Four straight trillion-dollar deficits later, he hasn’t even come close. His latest budget projects a deficit of $1.3 trillion for FY2012.
While some had hoped that the President might take some responsibility for breaking his promise, he has offered only excuses – for example, that the recession turned out to be deeper than he realized.2 But this excuse does not stand up to scrutiny: As recently as February of last year, well after the full extent of the recession was known, the President emphatically stated that he planned to keep his promise to cut the deficit in half, and provided projections to prove it.3 This pattern – promising one thing, then delivering another – casts doubt on the President’s latest round of promises and projections, which show deficits falling over time.
Debt: Under President Obama’s watch, the federal government’s total debt has surpassed the size of the economy – undermining job creation today and threatening a debt crisis tomorrow. According to its own numbers, the President’s budget ignores the drivers of the debt, bringing America perilously close to a European-style crisis.
Budget Gimmicks: The President’s budget inflates its deficit-reduction claims by taking credit for over $2 trillion in savings already in law and the exploitation of discredited budget gimmicks, including almost $1 trillion in “savings” from money that was never requested and never to be spent in Iraq and Afghanistan. Also, when it comes to measuring tax rates, Pell grants, and the Medicare “doc fix” (scheduled cuts to doctors’ reimbursements that are systematically avoided), his budget adjusts the starting line to satisfy his finish line.
Broken Promises: By failing to put forward long-overdue reforms, his budget allows Social Security to fall into bankruptcy (imposing an across-the-board 23 percent cut on seniors) and gives unaccountable government bureaucrats control over cutting Medicare in ways that would result in denied care for seniors. No credible action is taken to lift the crushing burden of debt. This President’s empty promises are quickly becoming broken promises for millions of Americans.
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