Monday, February 14, 2011

Obama Unveils His 2012 Budget

Here are the two most important numbers; $3.7 trillion and $1.1 trillion. The first number is the budget. The second number is the projected deficit increase just for the year.

Video embedded below.

"The Obama administration published its budget for Fiscal Year 2012 today, and headlines are full of references to the "cuts" it contains. But memories tend to be short, and I thought it would be interesting to compare the administration's 2012 budget to the first one it prepared, for FY 2010. The 2010 budget had projections for the following ten years, including, of course, a projected budget for FY 2012. So how does the administration's actual 2012 budget compare to the 2012 budget that it forecasted when it first took office?

In its 2010 budget, the Obama administration projected that in FY 2012, total federal outlays would add up to $3,662,000,000,000. In its actual FY 2012 budget, the administration is asking for total outlays of $3,729,000,000,000. That's right: the Obama administration has responded to skyrocketing deficits and heightened concern about federal debt by increasing the amount it is requesting for next year, compared to its projections of just two years ago, by $67 billion. Only in Washington is this a "cut."

Moreover, in its 2010 budget, the Obama administration projected that in FY 2012, it would run a deficit of $581 billion, or 3.5% of GDP. Now, the administration tells us that its FY 2012 budget will run a deficit of $1.1 trillion, or 7% of GDP, nearly double what it had projected. The press expects us to take seriously the claim that Obama's budget "would cut deficits by $1.1 trillion over the next decade." But it doubles the FY 2012 deficit, compared to its own projection of just two years ago. Why on earth should we take seriously the administration's new, revised projections for the next decade, grim as they are?

Here is the Press Briefing.

Video embedded below.

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