President Obama has introduced his latest budget. On the cover we are greeted by a picture of a large mountain. It is unusual and pretty but mostly it made me wonder whether — for once — the Obama administration was demonstrating tremendous self-awareness. This budget would indeed produce a mountain of debt so the image is fitting. Debt held by the public will go from $14.1 trillion in 2016 to $14.7 trillion in 2017 and then onto $21.3 trillion in 2026. Under the budget’s very rosy assumptions, deficits, which have already grown from $438 billion in 2015 to $616 billion in 2016, fall to $503 billion in 2017 (how deficits shrink by over $100 billion is a mystery) but they will be up to $741 billion in 2026.
This increase in debt and deficit is happening in spite of the assumption of large revenue collections over the next ten years; from $3,644 in 2017 to $5,669 billion in 2026. Maybe it has a little to do with the spending, which will be exploding from $3,951 billion in 2016 to $4,147 billion in 2017 on its way to $6,462 billion in 2026.
But please don’t worry because, according to the president’s budget, all this debt and deficit will produce better than a 4 percent average growth rate for the next ten years. Never mind that we have been out of a recession for several years now and that recessions tend to happen about every ten years.
Does the president think we will get economic growth from his proposal to slap a $10 tax per barrel of oil?
According to my colleague Jason Fichtner, another interpretation of the president putting this mountain picture on the cover of his budget is that “it symbolizes the mountain he has to climb to get any parts of his budget through Congress.” Jason may have a point since Republicans have already said that the president’s budget is dead on arrival. They won’t even hold hearings on the budget. That would be unprecedented but it really tells you all you need to know about what the Republicans think of the president’s budget.