At a House Budget Committee hearing today, Chairman Paul Ryan and Congressional Budget Office Director Doug Elmendorf had this exchange:
Ryan: “We got your re-analysis of the President’s budget. I won’t go back into that. But the President gave a speech on April 13th where he outlined a new budget framework that claims $4 trillion in deficit reduction over 12 years. Have you estimated the budget impact of this framework?”
Elmendorf: “No, Mr. Chairman. We don’t estimate speeches. We need much more specificity than was provided in that speech for us to do our analysis.”
Bingo. As I wrote back in April, when President Obama made his big budget speech, it wasn’t at all clear from where his numbers were coming — nor in what direction they were heading. A “fact sheet” on his “Framework for Shared Prosperity and Shared Fiscal Responsibility” gave a few more specifics, but little or no context to make real sense of them. Even for seasoned budget experts, it was a puzzlement. At the time, I predicted it would never get submitted to the CBO, and so far I have been proven correct. The whole mess now seems like nothing more than a political ploy to make Obama seem like a debt hawk. We also know now that Treasury Secretary Tim Geithner had to push the White House to do even that.
And if the White House ever did submit his plan/speech, Team Obama probably would not like what the CBO had to say about it. The bipartisan Committee for a Responsible Federal Budget did their best to shed some light on the plan/speech:
The President’s Framework falls short of both the Fiscal Commission recommendations and those from the House Budget Committee, both of which would reduce the deficit by over $4 trillion and reduce the debt to below 69 percent of GDP by the end of the 10-year period. … Measured against CBO assumptions, it does not appear that the $2.5 trillion of deficit reduction in the President’s Framework would be sufficient to reduce the deficit to 2.5 percent of GDP in 2015 or 2 percent in 2020, as claimed. Using reasonable phase-in assumptions, we estimate that unless the debt failsafe is employed (as it would be in this circumstance), deficits would remain at or above 3 percent of GDP throughout the decade. As a result, debt would continue to slowly increase as a share of the economy, reaching 77 percent of GDP by 2021.
You know who does have a comprehensive budget plan out there, one that is actually scored by the CBO and even uses the CBO’s gloomy economic numbers? Paul Ryan. The one actual plan Obama does have does nothing to “bend the curve” of rising federal debt as this chart shows: