- Four years of spending of more than 24% of GDP, the four highest spending years since 1946. In the current fiscal year of 2012, despite talk of austerity, Mr. Obama predicts spending will increase by $193 billion to $3.8 trillion, or 24.3% of GDP.
- Another deficit of $1.327 trillion in 2012, also an increase from 2011, and making four years in a row with deficits above $1.29 trillion.
- Revenues are at historic lows because of the mediocre recovery. The White House budget office estimates that for the fourth year in a row tax revenues won't reach 16% of GDP. The last time they were below 16% for any year was 1950.
|Chart1: The public portion of the national debt is now approaching 80% of GDP. Economists believe that when public debt-to-GDP ratios reach 90% the economic damage begins to rise.|
Holistically the Obama 2013 budget is fundamentally just a cut and paste from his previous three spending spree budgets freshened up with some new and improved class warfare tax hikes and updated with his perennial smoke and mirror accounting and spending gimmicks. A topside review of President Obama’s latest schematic for bankrupting America comes courtesy of the U.S. Senate Republican Policy Committee, with the committee’s overarching comment that “President Obama’s fiscal year 2013 budget increases spending every year, proposes the largest tax increase in history, burdens the country with more debt, and never balances the budget”. The following are the RPC’s highlights:
- President Obama’s 2013 budget spends $3.8 trillion, runs a deficit of nearly $1 trillion.
- The 2013 budget includes total ten year spending of $47 trillion, $11 trillion of it borrowed.
- Proposed fiscal year 2013 spending is 23.3% of GDP. In FY 2022, well after the White House says the economy should have recovered, spending is 22.8% of GDP, far higher than the country’s 40-year average of 20.6% of GDP.
- President Obama’s budget can barely bring the deficit below $1 trillion; the fiscal year 2013 budget deficit is projected to be $901 billion.
- At the end of President Obama’s 10-year budget window in FY 2022, there is still a deficit of $704 billion.
- President Obama’s budget calls for $11.2 trillion in additional gross debt from fiscal year 2012 to fiscal year 2022.
- Under the President’s budget Gross National Debt will total $26 trillion in fiscal year 2022 under this budget, and annual interest costs on the debt will be $850 billion.
- The Obama budget raises taxes by nearly $1.9 trillion from 2013 to 2022, the largest tax increase in U.S. history.
- President Obama raises taxes on people making more than $200,000 or couples making over $250,000. The two new tax brackets for those making over these amounts would be 36% and 39.6%.
- The President’s budget reinstates the limitation on itemized deductions for high-income earners; provisions could add 2% or more to a taxpayer’s rate.
- Limits the value of itemized deductions for high earners to 28%.
- For upper-income taxpayers, capital gains would be taxed at 20%. The current rate is 15%.
- The estate tax would be reinstated at 2009 levels.
- President Obama calls for his favorite class warfare tax known as the "Buffett Rule", but does not include an actual proposal for how to implement it.
“The White House’s budget for fiscal 2013 begins with a broken promise, adds some phony policy assumptions, throws in a few rosy forecasts and omits all kinds of painful decisions. Even then, the proposal would add $1 trillion more to the national debt than Obama contemplated a few months ago — and it is a non-starter on Capitol Hill, where even Senate Democrats have no plans to take it up.”