By Peter Roff, Thomas Jefferson Street blog
As my bloleague John A. Farrell wrote here Wednesday, there are a few things in President Barack Obama's FY 2011 budget proposal worth saluting. Unfortunately, the bad outweighs the good. Obama and the Democrats in Congress have proposed an increase in the federal debt limit of $1.9 trillion--or just over $6,500 per person--making it the largest debt limit increase in U.S. history. And, points out House Republican Whip Eric Cantor, that's on top of two other increases in the debt limit in the past 12 months that total $1.079 trillion.
If that were not enough, an analysis prepared by the nonpartisan National Taxpayers' Union Foundation says Obama's budget document is loaded with "recycled program cuts," "tax hikes masquerading as spending cuts," and "spending hikes masquerading as tax cuts."
- The budget lists cuts and reductions to 78 discretionary programs totaling $10.3 billion annually. Of these, NTUF says, 24 (representing $4.5 billion in savings) were already included in the FY 2009 list of savings and terminations--meaning Congress has already rejected them once.
- The budget includes 25 mandatory program changes producing a claimed savings of $47.2 billion over five years; $19.2 billion of the total comes from the repeal of 12 energy-related tax credits--which, NTUF says, are more properly classified as revenue increases rather than spending cuts.
- The budget shows that federal outlays will increase by $67.5 billion over the period 2011-2015 strictly because of proposed changes in tax policy, including $13.8 billion to "reform and extend Build America bonds" and $547 million to "extend COBRA health insurance premium assistance." The remainder of the $67.5 billion is for "refundable" credits--which are not exactly the same thing as tax cuts.
"As hard as the White House tries to reassure Americans about the nation's finances, taxpayers have many reasons to be afraid--very afraid--that President Obama's team won't fare any better at controlling deficit spending than the Bush administration did," NTUF Senior Policy Analyst Demian Brady said. "Americans will find a mostly gloomy fiscal horizon ahead for their country if the president's proposals become law."
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Corrected on 02/05/10: An earlier version of this article misstated the fiscal year for the president's budget proposal. The correct year is FY2011.