Dueling Budget Visions
The budget debate season kicked off in January when the Congressional Budget Office (CBO) released its annual outlook of spending and tax receipts for the next ten years. And the news wasn’t good, or rather, regarding the deficit, the news was more dismal than usual. The short-term deficit reduction CBO had previously forecast vanished – instead of dropping to $414 billion in 2016, it will rise to $544 billion. Spending will continue to outpace federal income, but at a faster rate than in CBO’s previous projection, coming in $1.56 trillion higher over the period from FY 2015 to 2025.
President Obama followed up with the release of his budget proposal in February. His plan would see even more spending than CBO’s baseline, and was promptly pronounced DOA in Congress.
The season picks up again this week as Congressional groups begin releasing their own budget blueprints representing their respective policy visions. Votes may be held in the House of Representatives as early as next week on the resolutions, though the schedule is currently uncertain.
The chart below shows the actual total spending level for FY 2016 and compares the spending levels in the budget proposals released so far by the President , the House Republicans, the Republican Study Committee, and the Progressive Caucus.
The CBO budget baseline shows the level of spending that would occur if current laws remain unchanged. Under this baseline, spending would increase by an annual average of 5 percent from FY 2017 through FY 2026. Over the ten year period, outlays would total $51.39 trillion.
Under President Obama’s plan (which we analyzed here), outlays would increase at a faster pace than the baseline over the first five years – with annual increases of 5.5 percent – and more slowly over the last five years (4.8 percent). Over ten years, spending would exceed the baseline by $1.24 trillion.
Under the Progressive Caucus’s budget, spending would reach $4.4 trillion in FY 2017 – a 12 percent spike from 2016. Over the next nine years, annual increases would slow to 4.9 percent. Outlays would be $3.39 trillion higher than the baseline projection over the next decade.
The House Republican’s budget (which we analyzed in more depth here) would cut spending by one percent for two consecutive years (reductions of $37 billion next year and $33 billion in 2018) after which outlays would grow by 4 percent annually. Over ten years, total spending would be $7.26 trillion below the baseline.
The Republican Study Committee, a caucus of conservative Republicans, would cut FY 2017 spending by $214 billion, a 5.5 percent reduction. Spending over the next nine years would increase at a 3.3 percent annual rate. Over ten years, total spending would be $42.75 trillion – $8.64 trillion less than the baseline.
More on Obama’s Budget
NTUF has an op/ed published with more analysis on President Obama’s budget, especially its ill-advised tax on energy that will ultimately fall on middle-class consumers.