As we dig into the President’s budget, more emerges:
1) Remember the President stating his budget “identified $2 trillion in savings over the next decade?” It actually increases spending by $1 trillion. But he classifies as “savings” $1.4 trillion in tax increases (apparently savings for the government, not for you) and $1.5 trillion “saved” in Iraq relative to a fantasy baseline that otherwise assumes current spending levels forever. The Iraq gimmick is the equivalent of a family deciding to “save” $10,000 by first assuming an expensive vacation and then not taking it.
2) Real federal spending per household — $24,000 before the recession — would reach $33,000 per household by 2019. Between 2008 and 2013, the $5.7 trillion in new debt will come to $48,000 per household.
3) It is easy to “cut the deficit in half” after you’ve quadrupled it. Furthermore, three upcoming developments — the end of the recession, troop pullout in Iraq, and phase-out of the supposedly-temporary “stimulus” spending — would, by themselves, cut the 2013 budget deficit in half. President Bush was slammed for averaging $300 billion budget deficits while funding a war. President Obama will be praised for running $500 billion deficits in 2013 at a time of (assumed) peace and prosperity.
4) The President’s budget proposes a new PAYGO law — and then violates it by $3.4 trillion.
5) The tax increases are staggering. The President would raise taxes by $1 trillion on the top 2.5 million tax filers. That comes to $400,000 per tax filer over ten years. And despite these harsh tax hikes (and a $646 billion cap-and-trade tax hike), the President’s rosy budget assumes a much faster economic recovery than CBO or the Blue Chip Consensus.
— Brian Riedl is Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at the Heritage Foundation.