Today the Congressional Budget Office released its Preliminary Analysis of the President’s Budget for 2012. The CBO finds that Obama’s budget incorporates unduly optimistic economic assumptions and assumes that certain money will materialize for no apparent reason. Consequently, the CBO concludes that Obama’s budget underestimates the total deficits over the next ten years by $2.3 trillion.
Senator Jeff Sessions sums up some of the high points:
* The Administration had claimed the mantle of fiscal responsibility through the use of a concept known as “primary balance”–which pretends that trillions of dollars in interest payments simply don’t add to the debt. But even this bizarre claim falls apart: deficits are greater than net interest payments every single year. Net interest totals $931 billion by the end of the decade.
* While the Administration proposed adding “just” $8.7 trillion in new spending, CBO’s analysis finds that total new spending will actually add up to $9.6 trillion.
* The president claimed to have found $1 trillion in deficit reduction, but CBO wiped that out–zeroing out a mystery $435 billion transportation tax, $315 billion from a “doc fix” gimmick, and $1.7 trillion in revenues based on overly optimistic economic assumptions.
* The Administration’s own numbers show that the lowest deficit over the next ten years will be $600 billion–much higher than anything we saw under President Bush. But because OMB relied on “rosy scenarios” of economic growth, CBO tells us that we won’t see deficits lower than $748 billion.
It is not unusual for a president’s budget to be dead on arrival, especially beyond the fiscal year immediately in prospect. But this is an extreme case: President Obama’s budget is not even a starting point for discussion.