Federal Budget

Lies, damned lies and budget forecasts

dollar signs

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.

Year Revenues Spending Deficit
2010 Projected 2,381 3,552 1,171
2010 Actual 2,162 3,457 1,294
2011 Projected 2,713 3,625 912
2011 Actual 2,303 3,603 1,299
2012 Projected 3,081 3,662 581
2012 Actual 2,450 3,537 1,086
2013 Projected 3,323 3,856 533
2013 Estimate 2,712 3,684 972

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.)

Year Revenues Spending Deficit
2014 Projected 3,034 3,778 744
2015 Projected 3,332 3,908 576
2016 Projected 3,561 4,090 528
2017 Projected 3,761 4,427 487

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.

About the Author

Richard E. Cohen, an FCW contributing writer, has covered Capitol HIll for more than three decades and is the author of several books on Congress.

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Reader comments

Thu, Oct 10, 2013

You know what is ironic, is that nobody up there gets it, that is what is ironic. We waste time on paper work just to "CYA" because no ones wants to be a fault not even the ones commenting here. It is not about Republicans or Democrats it is about us being able to take another breath of freedom. As long as we continue to vote this same people in and vote on radicules that want to change it but want to do it at our expense then beware of what is going to happen to us. Playing the blame game and blaming one person is stupidity, that makes us no better then the ones we have up there. America better grow up goes our greed is going to send us ( if we are not there already) into termoil and someone else running this country. God grant us the sernity to accept the things I can not change, the courage to change the things I can, and the Wisdom to know the difference. Amen....

Mon, Jul 15, 2013

But according to the article, these figures are just Obama's estimates in 2009. The Projected numbers are what they projected in 2009, not in 2010 or 2011 or 2012. No surprise they're wildly off four years out. All this really says is that the recovery was a lot slower than they expected, and it's not like we have lots of data about these catastrophic banking events with which to make an educated guess. And if you look at the 2014 projection, it looks more realistic: revenues rising between 2013 and 2014 by about the same amount that revenues rose between 2012 and 2013; spending rising by a similar amount compared to 2012/2013; slower increases in revenue and variable spending increases in the out years. This looks like an instance of the author cherry-picking numbers to make the readers gravitate towards a specific point of view, not like a real point being made.

Wed, Apr 17, 2013

The ironic thing is, the Republican controlled House is going to make Obama look good by supressing spending at a faster rate than Obama can propose new spending. So the deficit goes down and Obama will look good. Thank you House. This is what's causing all the turmoil. If spending proposals weren't so over the top (read Obamacare), we wouldn't be suffering the House's drive to reduce federal spending. I felt better about the $787B stimulus bill the Democrats approved in March 2009 (that the president said was going to "rebuild our crumbling infrastructure and go to shovel ready jobs") than I do about Obamacare. But the albatross was upheld by the Supreme Court, so here we are, out of money and suffering the House's attempt to restore fiscal credibility in spite of the president's spending plans.

Tue, Apr 16, 2013

If the table is correct then 8 years of Bush debt is about 9.8% of 4 years of Obama dept. This is about 10 time the debt rate of 8 years of Bush, but only in 4 years. ( 459 Bush) to (4691 Obama)

Mon, Apr 15, 2013 Kevin McClure Chicago

As long as we're on the subject of how numbers can mislead, it's misleading to report the deficit inherited by Obama as $459 billion. Three weeks prior to his inauguration, CBO was already projecting a $1.2 trillion deficit for the coming year: http://www.cbo.gov/publication/24860 .

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