No ‘substantial effect’ on long-term budget woes
Hey, it’s not just me pointing out the many flaws in the Obama budget. This from the Committee for a Responsible Federal Budget:
Unfortunately, the Administration does not achieve either of the fiscal goals it established for its own Fiscal Commission. For one, the budget does not reach primary balance in 2015. Instead, at just over $600 billion, the deficit remains more than $100 billion away from primary balance. Secondly, the budget does not make meaningful improvements to the longterm fiscal outlook. Few of the policies in the budget would have a substantial effect on the trajectory of spending or revenues outside of the ten-year window.
As noted above, the level at which the budget stabilizes the debt – 77 percent of GDP – is way too high. It is well above historical levels (about 40 percent of GDP) and the traditional target of 60 percent of GDP – and could threaten the government’s ability to borrow in case of a real emergency down the road. It also begins to creep up again at the end of the ten-year window, and likely will grow substantially beyond this window.
Unfortunately, the budget doesn’t make any meaningful improvements to the largest problem areas of the budget. The budget does keep defense costs from increasing, trim Medicare and Medicaid spending a bit, and limit tax expenditures for high earners. But these measures only scratch the surface when the Administration should be calling for real defense cuts, serious changes in federal health spending, and fundamental tax reform – as well as Social Security reform designed to achieve 75-year sustainable solvency.