What's really in the budget?
March 4, 2009| By Nathaniel Ward
Despite the recession and the $1.4 trillion budget deficit, the House passed a $410 billion "omnibus" spending bill last week. Combined with the colossal $1.1 trillion "stimulus" bill, the omnibus increases spending for discretionary programs a staggering 80 percent -- from $378 billion in 2008 to $680 billion this year.
And President Barack Obama has now introduced his 2010 budget, which goes even further. Heritage budget expert Brian Riedl analyzed this plan in depth and reveals some hidden truths:
- False Savings. "Remember the President stating his budget 'identified $2 trillion in savings over the next decade?' It actually increases spending by $1 trillion." So where are the savings? Massive tax hikes and budget gimmicks based on improbably assumptions. One of the more egregious "is the equivalent of a family deciding to 'save' $10,000 by first assuming an expensive vacation and then not taking it."
- Massive New Spending and Debt. "Real federal spending per household — $24,000 before the recession — would reach $33,000 per household by 2019. Between 2008 and 2013, the $5.7 trillion in new debt will come to $48,000 per household."
- Misleading Deficit Claims. "It is easy to 'cut the deficit in half' after you've quadrupled it," Riedl explains. Moreover, the expiration of certain spending measures--like the massive "stimulus" bill--would accomplish that goal anyway.
- Pay-As-You-Go. "The President's budget proposes a new PAYGO law — and then violates it by $3.4 trillion."
- Staggering Tax Hikes. The budget proposal would raise taxes by $1 trillion--not including "a $646 billion cap-and-trade tax hike" that would further hamper economic recovery.
- Faulty Assumptions. In order to make everything add up, the budget makes some very generous assumptions about economic growth--a far rosier outlook for economic recovery than either government or private experts predict.
There is an alternative plan to this budget-busting overspending, which Heritage experts prepared and distributed to lawmakers and their staffs. The key elements: limit spending; make realistic assumptions, including about Iraq; avoid harmful tax hikes on work and investment; and don't implement policies that will make things worse.
Nathaniel Ward is the Editor of MyHeritage.org—a website for members and supporters of The Heritage Foundation.
