Obama Budget Seeks 2 Trillion More in Spending and Deficits
Investors Business Daily

February 1, 2010

by Brian M. Riedl

Last year, President Obama swept into office on a promise to confront tough choices--and then released a budget proposing the largest debt-and-spending spree in American history. With Washington having committed itself to more government than its taxpayers could realistically afford, basic fiscal responsibility suggests that the President scale back his expensive proposals. Instead, this year's budget is even more fiscally irresponsible.

Over the 10 years in which both budgets overlap (FY 2010-2019), this year's budget would spend an additional $1.7 trillion and run up an additional $2 trillion in budget deficits (see Table 1).[1] In fact, this year's proposal shows annual budget deficits as much as 49 percent larger than last year's proposal--raising the debt by an additional 6 percent of GDP over the same period. It is a spending spree that will drive up both taxes and deficits.

Growing Debt

In addition, the President's budget would:

· Permanently expand the federal government by nearly 3 percent of gross domestic product (GDP) over 2007 pre-recession levels;

· Raise taxes onall Americans by more than $2 trillion over the next decade (counting health care reform and cap and trade);

· Raise taxes for 3.2 million small businesses and upper-income taxpayers by an average of $300,000 over the next decade;

· Borrow 42 cents for each dollar spent in 2010;

· Run a $1.6 trillion deficit in 2010--$143 billion higher than the recession-driven 2009 deficit;

· Leave permanent deficits that top $1 trillion in as late as 2020; and

· Double the publicly held national debt to over $18 trillion