Lies, damned lies and budget forecasts
- By Richard E. Cohen
- Apr 12, 2013
President Obama's budget proposal projects steadily declining deficits. Do the facts support the promise? (Stock image)
President Obama this week submitted his annual budget, which boosts IT spending, establishes plans for expanded cybersecurity efforts, and eventually brings the annual deficit almost down to the $459 billion level that he inherited when first elected. But agency executives had better hope the president's budget forecasters are closer to the mark than they were four years ago.
When Obama took office in the middle of the deep recession, his budget projected the deficit would decline from $1.412 trillion in 2009 to $533 billion in the current 2013. Yet as shown in the following figures that Obama submitted in February 2009, plus the most recent results according to the Office of Management and Budget, the president's budget was far too optimistic in its revenue projections. And the slowdown in spending during the past two years reveals the impact of the Republican-controlled House.
All dollar figures below are in billions of dollars.
The following forecasts from the budget that Obama unveiled this week show robust increases in revenues resulting from economic growth, which would override the renewed growth in spending that would fund the Veterans Affairs Department's claims-processing system, the next generation of weather satellites and other government operations. (Again, dollar figures in billions.)
If the notably unpredictable budget forecasts prove accurate, the deficit in Obama’s final year in the White House would remain higher than the 2008 deficit, which had been the largest in U.S. history. Making things worse, the Congressional Budget Office forecast in January a renewed rise in the deficit immediately after Obama leaves office, which would result chiefly from the surge in Social Security and Medicare spending because of the retirement of baby-boomers.
"After 2017, if current laws remain in place, outlays will start growing again as a percentage of [gross domestic product]," according to CBO. "The aging of the population, increasing health care costs, and a significant expansion of eligibility for federal subsidies for health insurance will substantially boost spending for Social Security and for major health care programs relative to the size of the economy." That red ink concerns deficit hawks and some economists, who warn that the steadily growing federal debt will eventually drag down the U.S. economy. But for agencies, the worry is even more direct: The only certainty in the budget numbers is that they will change, and -- optimistic projections notwithstanding -- virtually all the pressures are pushing in a downward direction.