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Does the President Believe His Own Budget?



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A recent Heritage Foundation analysis found that President Obama’s budget likely underestimates its discretionary spending costs. After proposing an 8 percent increase for fiscal year 2010, his budget assumes that discretionary spending growth will be frozen at the inflation rate (approximately 2.5 percent annually) from 2011 through 2019. This would reduce discretionary spending below 7 percent of GDP — a level rarely seen since the 1940s.

These restrained discretionary spending figures are incompatible with the president’s pledges of historic increases in discretionary spending for education, highways, energy, health, veterans, and science. They also leave no room for the predictable extensions of expiring discretionary “stimulus” spending. In Washington, promising unspecified discretionary spending restraint sometime in the future, but never the present, is a common presidential budget assumption used to mask the size of future budget deficits.

Consequently, the Heritage analysis showed that a more realistic estimate of the president’s spending proposals would show discretionary spending growing at least as fast as nominal economic growth — typically 4 percent to 5 percent annually. This would add $1,545 billion to the White House’s discretionary spending estimates over the decade ($314 billion annually by 2019). Even these estimates assume that President Obama can successfully hold spending on the global war on terrorism to $50 billion annually. It will likely cost even more.

Yet in the Washington Times, a White House official called Heritage’s analysis “creative accounting” and insisted that — despite all the proposed spending hikes — the Obama administration will freeze discretionary spending growth at the inflation rate from 2011 through 2019.

There is a simple solution. If the White House is as serious about these spending projections as they claim, they should seize this opportunity to give them the force of law. President Obama could call on Congress to enact a law capping annual discretionary spending at the 2011 through 2019 levels in his budget. If he will not, lawmakers should offer their own legislation capping discretionary spending at the president’s levels (and with this waste, staying under the cap shouldn’t be difficult). Otherwise, a president not willing to lock in his own spending projections should not expect others to take those projections seriously, either.

  — Brian M. Riedl is Grover M. Hermann Fellow in Federal Budgetary at the Heritage Foundation.



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