Congress’ chief scorekeeper says President Obama’s budget never achieves primary balance, the key measure the White House said would show the country is living within its means.
In a preliminary analysis the budget Mr. Obama sent to Capitol Hill last month, the Congressional Budget Office says deficits will total $9.5 trillion over the next decade and never once will it be in balance — even when subtracting interest costs.
The closest the government will come to balance is in 2018, when the deficit will be $902 billion and net interest costs are projected to be $725 billion — still leaving a substantial deficit of $177 billion.
That contradicts a talking point for Mr. Obama and his administration, where officials have said their budget would have the government live “within our means,” meaning it was taking in enough revenue each year to pay for its operations, minus the interest costs on the debt.
Congress is required to use CBO’s estimates when writing bills and producing a budget, so the new estimates could prove devastating to the president’s hopes of enacting his plans.
White House budget director Jacob “Jack” Lew, in a blog post at WhiteHouse.gov, said the chief differences between their estimates and CBO’s are that CBO discounted some of the White House’s unspecified tax increases and also took a grimmer view of future economic growth.
“There is large uncertainty in economic projections and differences of opinion when it comes to assessing individual policies. But regardless of our differences, CBO confirms what we already know: current deficits are unacceptably high, and if we stay on our current course and do nothing, the fiscal situation will hurt our recovery and hamstring future growth,” Mr. Lew said.
Mr. Obama’s budget said deficits would total $7.2 trillion over the next 10 years, while CBO says the actual amount will be $9.5 trillion.
Still, CBO actually shows discretionary spending — the money that keeps basic government operations going — being cut under Mr. Obama’s budget by the middle of this decade, before rising.
The bigger drivers of deficits is automatic spending, such as Social Security and Medicare, and interest on the debt.
Interest makes up just 5.9 percent of federal spending now, but by 2021 it will be 16.2 percent of all spending. Mandatory spending will be nearly 60 percent in 2021, and basic government operations will constitute the rest.