The ballyhooed budget spending freeze that will be a feature of the State of the Union address tomorrow doesn’t cover behemoth entitlement programs.
It doesn’t cover a second stimulus.
It is limited to an electorally-timed three-year period.
The White House is already promising that favored left-wing programs in education and the environment would get a pass. The “estimated $250 billion in savings over 10 years would be less than 3 percent of the roughly $9 trillion in additional deficits the government is expected to accumulate over that time.”
And President Obama was against such a spending freeze before he was for it:
Says Michael Steel, spokesman for House Minority Leader John A. Boehner (R., Ohio): “Given Washington Democrats’ unprecedented spending binge, this is like announcing you’re going on a diet after winning a pie-eating contest.”
Give me your best analogy.
Fill in the blank: Spender-in-chief Obama proposing a spending freeze is like…
My favorite so far comes from Helen MacDermott via Twitter: “Obama proposing spending freeze is like Heidi Montag telling Joan Rivers to lay off cosmetic surgery.”
Related news from the CBO this morning:
The latest congressional budget estimates due Tuesday predict a $1.35 trillion deficit for this year, a top Capitol Hill aide says.
The Congressional Budget Office figures confirm the massive problem facing President Barack Obama and his Democratic allies just days before his Feb. 1 budget submission. The White House says Obama will propose a three-year freeze on domestic agency budgets, though the savings would barely make a dent.
The deficit would slide to $480 billion by 2015, CBO says, but only if tax cuts on income, investments and large estates are allowed to expire at the end of this year. Most budget experts see deficits as far higher once tax cuts and other policies are factored in.
The 2010 deficit figure is in line with previous estimates and would be a slight decline from last year’s $1.4 trillion shortfall. But plans afoot on Capitol Hill for a new jobs bill and a coming Obama request for war funds would add to the total.
The figures arrived just hours before the Senate is likely to reject a White House-backed plan to establish a bipartisan task force to recommend steps to curb the deficit.
The figures bring continued bad news on the deficit, keeping the pressure on Obama and congressional Democrats to demonstrate they’re serious about taking on the flood of red ink.
Direct from the CBO Director’s blog:
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CBO projects, that if current laws and policies remained unchanged, the federal budget would show a deficit of $1.3 trillion for fiscal year 2010. At 9.2 percent of gross domestic product (GDP), that deficit would be slightly smaller than the shortfall of 9.9 percent of GDP ($1.4 trillion) posted in 2009. Last year’s deficit was the largest as a share of GDP since the end of World War II, and the deficit expected for 2010 would be the second largest. Moreover, if legislation is enacted in the next several months that either boosts spending or reduces revenues, the 2010 deficit could equal or exceed last year’s shortfall…
…Under current law, the federal fiscal outlook beyond this year is daunting: Projected deficits average about $600 billion per year over the 2011–2020 period. As a share of GDP, deficits drop markedly in the next few years but remain high—at 6.5 percent of GDP in 2011 and 4.1 percent in 2012, the first full fiscal year after certain tax provisions originally enacted in 2001, 2003, and 2009 are scheduled to expire. Thereafter, deficits are projected to range between 2.6 percent and 3.2 percent of GDP through 2020.
Those accumulating deficits will push federal debt held by the public to significantly higher levels. At the end of 2009, debt held by the public was $5.8 trillion, or 53 percent of GDP; by the end of 2020, debt is projected to climb to $15 trillion, or 67 percent of GDP. With such a large increase in debt, plus an expected increase in interest rates as the economic recovery strengthens, interest payments on the debt are poised to skyrocket. CBO projects that the government’s annual spending on net interest will more than triple between 2010 and 2020 in nominal terms (from $207 billion to $723 billion) and will more than double as a share of GDP (from 1.4 percent to 3.2 percent).
February 13, 2013 02:12 PM by Doug Powers
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