Monday, February 14, 2011

A few notes on the Obama's 2012 Budget

Here are a few items about Obama's proposed budget for 2012. (Remember that one thousand billion is a trillion.)

First, the Administration believes that government revenue will rise from $2,174 billion in 2011 (projected) to $3,003 billion in 2013. That is a 38% increase in revenue in two years. That just isn't going to happen.

Second, the Administration predicts that outlays will grow from $3,819 billion in 2011 (projected) to $3,771 billion. That has federal expenditures shrinking by slightly more than 1.25% in two years. That actually isn't impossible, but I doubt it will happen.

Rather than take these prognostications at face value, I decided to compare them to the 2010 budget from the Obama Administration.

First I looked at the Administration's projections (made in 2009) for 2010 with the actual recorded result in this year's budget. Two years ago the Administration believed that revenues would total $2,381 billion. The over-estimated that amount by $218 billion. They also thought that outlays (that's spending to the rest of us) would be $3,552 billion. This they also over-estimated - spending was actually $96 billion dollars LESS than that.* Overall, the budget deficit last year was $122 billion MORE than they had expected in 2009.

Then I compared the Administration's projections of 2011 to the 2011 projections from this year. Two years ago they projected that 2011 would produce $2,713 billion in revenue for the federal government, and that the government would spend $3,625 billion, with a deficit of $912 billion. The new budget forecasts that the federal government will only collect $2,174 billion in revenue for 2011, and will spend $3,819 billion in that year. That's a miss of $539 billion on the revenue side**, and an increase in spending of $194 billion. They missed their two year projection by $733 billion.

Revenue is only projected to be 80% of what they projected two years ago. Expenses are projected to be over 5% higher.

To repeat, they missed their two year projections by $733 billion. That miss is equal to two-thirds of the President's alleged deficit reductions for the next eight years.

So does anyone REALLY believe that revenues will increase by 38% in two years, given that they have remained essentially unchanged from 2009 to 2011? (In fact, they have decreased slightly, showing that our recovery isn't.) Or any of the rest of it?

I haven't looked at the Republican proposals, but I doubt they're any better. And they only claim to be cutting $100 billion from the budget, which represents less than 3% of spending for any upcoming year.

Our leaders are telling us bald-faced lies again. (No wonder the new press secretary doesn't want to address the press.) Fundamentally, it was governmental dishonesty that just got Mubarak overthrown. Perhaps we'll find out if Americans demand the same accountability from our rulers as the Egyptians did of theirs.

* At least according to their figures.

Obama's 2010 Budget proposal can be viewed here. (This was the original. They published a revised edition in May.)

Obama's 2012 Budget proposal can be viewed here.

In both cases look for the summary tables at the back.

Please, don't just take my word on the numbers, look them up for yourself.

** ADDED: Yes, Obama & Co. were expecting an end to the Bush tax cuts after 2010. However, they missed by 25%, and the Bush tax cuts wouldn't have made up that difference. They also assumed that unemployment would top out at no more than 8% with their stimulus package. They missed that estimate by 25% as well.

No comments: