The Obama Administration’s Office of Management and Budget (OMB) unloaded its disastrous mid-session budget review in a Friday afternoon dump and run — updating its own budget projections from February.
By the administration’s own analysis the forecast is bleak: 10% unemployment this year and a $1.47 trillion deficit next year.
The President’s plan is to add crippling tax hikes to the unrestrained spending and unprecedented deficits and debt.
Some of the key findings include:
Deficits. OMB projected deficits will be $8.474 trillion over the next 10 years. The deficit projection for the forthcoming year has risen by $150 billion compared with the February budget, and deficits are $243 billion higher in fiscal years 2011-15 than projected in February. By OMB’s own projections, the annual deficit under the President’s budget never falls below $698 billion, and reaches $900 billion in 2020.
Debt. Relative to the 2008 level ($5.8 trillion), debt held by the public under the President’s budget more than doubles in 5 years (to $13.3 trillion) and more than triples by the end of the decade (to $18.5 trillion). As a share of the economy, the debt rises inexorably, to 77.4 percent of gross domestic product [GDP] in 2020 (see Figure 1). Total debt reaches $26.2 trillion in 2020, $440 billion higher than the February estimate.
Spending. The deficits and debt are driven by higher spending. The President and the Democratic Congress have launched an unprecedented increase in spending, including: the $862-billion “stimulus” bill, which has yet to produce the promised economic growth and job-creation; legislation signed by the President that resulted in an 84-percent increase in non-defense discretionary spending, including “stimulus”; an expansion of the State Children’s Health Insurance Program [SCHIP] that increases spending by an average of 23.7 percent for 5 years, then abruptly cuts funding by 65 percent in 2014 — a cut that clearly will not happen; and the government takeover of the health care sector, which will increase spending by $2.6 trillion when fully implemented.
“The Mid-Session Review provides a revealing look at the costly consequences of this Administration’s relentless expansion in the size and scope of the Federal government. The failed trillion dollar stimulus, the reckless spending spree, and the costly health care overhaul are among the many lowlights that have exacerbated our looming fiscal crisis,” Ryan said of the OMB review. “In an unprecedented failure, Democrats in Congress offered no budget, no priorities, and no restraints to the unsustainable growth of government.”
“According to the Administration’s own numbers, the President’s policies will add nearly $8.5 trillion to the deficit over the next decade, drowning the next generation in red ink,” Ryan continued. “As the President often reminds Americans of the difficult situation he inherited, it is troubling to learn that relative to 2008, the President’s budget more than doubles the debt in 5 years and triples it in ten. Rather than tackle the explosion in spending driving our fiscal problems, Democrats remain intent on hitting Americans with the largest tax hike in history at the end of this year.”
“The President’s job-killing economic agenda — focused on more borrowing, spending, and taxing — will keep the unemployment rate high for years to come. The American people are fed up with Washington’s push to spend money we don’t have, add to our crushing burden of debt, and evade accountability for the dismal results,” Ryan concluded. “We need to chart a new course to get a grip on out-of-control government spending, spur job creation and sustained economic growth, and restart the American engine of prosperity.”
For the full analysis on deficits, debt, spending, tax hikes and economic assumptions complete with charts and graphs: House Budget Committee Republican Caucus analysis of OMB’s Mid-Session Review
House Republican Leader John Boehner (R-Ohio) on release of the OMB report again offered support for immediate spending cuts.
“House Republicans have offered up to $1.3 trillion in spending cuts to help get our nation on the path to fiscal sanity,” Boehner said. “We have offered to support a package of immediate cuts if President Obama sends one to Capitol Hill. Working together, we can make the hard choices necessary to save this country from the ruin of endless spending, endless deficits, and endless debt, and preserve the American dream for future generations.”
House Republican Whip Eric Cantor (R-Va.) also urged a course correction, moving back to free market principles.
“America is at a crossroads,” Cantor said. “If we get back to a system that inspires innovation and encourages ‘earned success’ among its people, America will remain the land of prosperity and opportunity for our children.”
House Republican Caucus Chairman Mike Pence (R-Ind.) spoke of what Obama once called America’s domestic enemy.
“Four years ago, then-Senator Barack Obama said our nation’s ‘rising debt is a hidden domestic enemy.’ As president, he has done little to confront this domestic enemy, spending over $6.1 trillion in the first 18 months of his presidency,” Pence said. “The message of today’s report is unambiguous: Washington desperately needs real leadership. We cannot continue to postpone the hard choices and sacrifices that are necessary to stop this fiscal train wreck.”
Republican Study Committee Chairman Tom Price (R-Ga.) offered this stinging rebuke of the Democrats’ idea of fiscal stewardship.
“This report throws ice water on the Democrats’ claims of fiscal responsibility,” Price said. “For the third year in a row, Washington’s binge-spending is creating the largest budget deficit in history. Under President Obama’s latest guidance, taxpayers will owe a stunning $26.2 trillion in debt only ten years from now. Just the interest payments alone could cripple our economy. Democrats claim we need job-killing tax increases while ignoring the fact that the enormous rise in debt is caused by Washington’s gluttonous appetite for spending.”
“Despite the immediate need to prioritize and reduce spending, the Democrats running Washington have no budget and no idea how to tackle this skyrocketing national debt,” Price added.