Date published: March 7, 2011
Journal code: NEAM
President Obama labeled bis 2012 budget proposal "a down payment toward a permanent fix" for the expected record deficit, but his fiscal 2012 budget proposal actually leaves deficits higher than his previous budget proposals.
The New York Times noted on February 14: "For the current fiscal year, which ends Sept. 30, the Obama budget projects a deficit of more than $1.6 trillion, the equivalent of nearly 1 1 percent of the gross domestic product; in those terms it would be the largest shortfall since World War ? ended." Président Obŕma has promised a falling deficit in the future, however. "If the projections are correct," the New York Times explained, "2012 will be the fourth and final year with a deficit over $1 trillion." But that's a big "if." Obama's first budget proposal called fora $912 billion deficit this year, compared with the $1.6 trillion he now projects, and a $581 billion deficit in 2012, compared with a $1 . 1 trillion currently projected.
Much of the deficit reduction within Obama's budget is based upon a huge tax increase: the expiration of the Bush-era tax cuts. The New York Times explained, "The deficit for the next fiscal year, 2012, is expected to be smaller by more than $500 billion, largely because of the expiration of those tax cuts and the twoyear stimulus package that Mr. Obama signed into law soon after taking office."
Obama's projected spending increases have remained largely static over his 2010-12 budget proposals, despite all the talk of "cuts." Only in Washington is a "cut" not a cut. Only in Washington could a sentence like the following one - taken from Obama's Budget Message for the 20 1 2 budget - be written without irony: "At the Department of Defense, for instance, we are reducing its funding by $78 billion over the next 5 years ön a course for zero real growth in funding."
Is zero real growth "reducing"? Only if you live in Washington. Of course, the Obama budget makes no attempt to ever - - at any future date, no matter how distant - balance the budget. And this is despite the fact that the budget assumes several unrealistic hypotheticals: The Bush-era tax cuts "for the rich" (those making $250,000 or more per year) will end, and economic growth will jump to more than four percent annually from 2012 through 2014.