Google+
Close

The Corner

The one and only.

The Obama Budget’s Magic Asterisks



Text  



Past presidential budgets have been declared “DOA,” or dead on arrival. President Obama’s budget should be declared “TBD” — to be determined. Despite taking an extra week to release this year’s budget, the president’s budget is an incomplete list of magic asterisks.

Overall, the budget’s claimed $2.2 trillion in deficit reduction over the decade is based on smoke and mirrors. It claims $315 billion saved from eliminating “certain tax expenditures” — but doesn’t list which ones. It claims to finance a $328 billion transportation trust fund without specifying what taxes would be raised. It takes credit for $321 billion in spending cuts to offset the Medicare “doc fix” from 2014 through 2021. What are the cuts? To be determined. It claims more than $150 billion in “program integrity” savings so vague that the Congressional Budget Office could not even score them in past budget estimates. The budget takes credit for $700 billion in “cuts” by comparing the long-planned drawdown of Iraq and Afghanistan spending against a baseline that implausibly assumes those costs would rise forever.

Throw in $200 billion in net interest savings from the above “cuts,” and it means that $2.0 trillion of the $2.2 trillion in claimed savings are pure gimmicks and magic asterisks, rather than specific, legitimate, measurable policy proposals.

Of course, the proposed spending increases — the Medicare doc fix, new transportation spending, high-speed rail, more Pell Grant entitlements, and another round of $250 checks for senior citizens — are all real and scoreable.

The biggest punt of all is on Social Security, Medicaid, and Medicare, where the president who once said he “refuses to pass this problem on to another generation of Americans” did exactly that by ignoring the entitlement recommendations of his own deficit commission. This prompted deficit commission co-chairman Erskine Bowles to add that the president’s budget is “nowhere near where they will have to go to resolve our fiscal nightmare.”

President Obama has stated that his budget eventually reduces non-security discretionary spending as a share of the economy to the lowest levels since the Eisenhower administration. Since discretionary spending is written from scratch annually, all figures beyond 2012 are just placeholders.

Given that, the president found an ingenious way to reduce projected discretionary spending: just reclassify highway spending and a portion of Pell Grants as entitlement spending. It’s like the old headline from The Onion: “Millions lifted out of poverty by redefinition of the term.” By the president’s logic, we could slash entitlement spending immediately simply by deciding to no longer count Medicare as an entitlement.

Strip away all the magic asterisks and gimmicks, and what remains is a budget too similar to the president’s previous tax-borrow-and-spend budgets. It raises taxes by $1.5 trillion, keeps spending at its highest level sustained level since World War II, and nearly doubles the national debt. Leadership cannot be TBD.

Brian Riedl is Grover M. Hermann fellow in federal budgetary affairs at the Heritage Foundation.



Text  


Sign up for free NRO e-mails today:

Subscribe to National Review