One would think the nation’s deteriorating fiscal picture would cause the White House to scale back it spending-and-debt spree. Think again. Over the ten years in which both budgets overlap (FY 2010–2019), this year’s budget would spend an additional $1.7 trillion and run up an additional $2 trillion in budget deficits. In fact, this year’s proposal shows annual budget deficits as much as 49 percent larger than last year’s proposal — raising the debt by an additional 6 percent of GDP over the same period. It is a spending spree that will drive up both taxes and deficits.
According to our quick analysis of his budget, the president’s budget also would:
* Permanently expand the federal government by nearly 3 percent of gross domestic product (GDP) over 2007 pre-recession levels;
* Raise taxes on all Americans by more than $2 trillion over the next decade (counting health-care reform and cap-and-trade);
* Raise taxes for 3.2 million small businesses and upper-income taxpayers by an average of $300,000 over the next decade;
* Borrow 42 cents for each dollar spent in 2010;
* Run a $1.6 trillion deficit in 2010 — $143 billion higher than the recession-driven 2009 deficit;
* Leave permanent deficits that top $1 trillion in as late as 2020 — a time of assumed peace and prosperity; and
* Double the publicly held national debt to over $18 trillion.
Before the recession, federal spending totaled $24,000 per U.S. household. President Obama would hike it to $36,000 per household by 2020 — an inflation-adjusted $12,000-per-household expansion of government. Even the steep tax increases planned for all taxpayers would not finance all of this spending: The president’s budget would add trillions of dollars in new debt.
President Obama has offered a budget that does nothing to address the nation’s serious short-term and long-term fiscal problems — and indeed makes them worse. By doubling the national debt over pre-recession levels, America could head toward the tipping point when rising debt levels will become too large for global capital markets to absorb, potentially triggering a financial crisis, an interest-rate spike, and gigantic tax increases.
The president who said, “I didn’t come here to pass our problems on to the next president or the next generation — I’m here to solve them” would, over the next decade, pass $75,000 per household in additional debt into the laps of our children and grandchildren.
— Brian Riedl is Grover M. Hermann fellow in federal budgetary affairs at the Heritage Foundation.