On Monday, Obama is slated to release his annual budget proposal for FY 2013, along with a 10-year budget (2012-2021) outlook. One would think that after talking incessantly about cutting spending, Obama would spend less money next year than this year. Yet, in Obama's world, a spending cut means spending less than you were slated to spend, even though it is still higher in nominal terms. The Wall Street Journal has already obtained the outline of his budget:
President Barack Obama's budget request to Congress on Monday will forecast a deficit of $1.33 trillion in fiscal year 2012 and will include hundreds of billions of dollars of proposed infrastructure spending, according to draft documents viewed by Dow Jones Newswires and The Wall Street Journal.
The projected deficit is higher than the $1.296 trillion deficit in 2011 and also slightly higher than a roughly $1.15 trillion projection released by the Congressional Budget Office last week.
Hence, even though revenues are projected to go up by $220 billion this year, the deficit will still tick up another $37 billion. Using CBO's baseline, that would mean spending will rise $257 billion this year under Obama. And that's during an election year. You can imagine what he would pull out of the hat if he wins a second term.
The specifics aren't published yet, but we have these nuggets from the article:
The budget includes more than $350 billion in short-term measures for job growth; a six-year, $476 billion proposal for roads and other surface-transportation projects; and more than $360 billion in savings in health programs such as Medicare and Medicaid. [...]
The budget also calls for a 5% increase in nondefense research-and-development spending over the previous year and proposes $2.2 billion for advanced manufacturing research and development—a 19% increase over 2012.
Surprise! More stimulus spending, plus more top-down federally-managed transportation, not unlike the Republican proposal in the House (yeah, we're looking at you), and almost identical to the Senate proposal, which raises taxes (supported by all Republicans except for 9). So how does Obama plan to reduce his $1.6 trillion deficit from last year? We'll wait and see, but undoubtedly, it will come out of the military.
Regarding the healthcare cuts, until we reform the entire healthcare system to reflect the free-market, these cuts are either notional or will squeeze Medicare patients even further.
Finally, what would an Obama budget be without tax increases:
The draft documents don't include all the details of the president's budget but show similarities to the budget plan the White House laid out in September 2011. The budget proposal, for example, repeats a call for $1.5 trillion in new revenue, mostly from ending Bush-era tax cuts for families earning more than $250,000 a year.
Let's pray with all our might that this will be Obama's final budget.
Cross-posted to The Madison Project