by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Yuval Levin isn’t buying into the narrative that President Obama’s budget proposal could serve as the basis for a workable compromise with congressional Republicans. Though Levin tells National Review Online readers the Obama plan has some good ideas, those ideas are “minuscule bright spots in what can only be described as a travesty of a budget.”
The bottom line is worse than even the Senate Democratic budget, and the little reforms and savings that are proposed are incredibly back-loaded in the out years of the budget window. By my reckoning, 93.8 percent of the claimed savings in this budget occur in 2017 or later. President Obama clearly has a great deal of faith in his successor.
And many of the underlying assumptions (laid out in the accompanying analytical perspectives document) are worse than ridiculous. Some of them (particularly those regarding long-term deficit and debt projections, and the notion that the policies proposed in this budget would bring the federal budget into balance in the mid-2050s) really have to be considered corruptions of OMB’s analytical process, and I imagine the agency’s budget examiners took some real cajoling to make them. The long-term projection table in this budget ends with federal revenues at 23.8% of GDP and spending at 15.8% of GDP. Do you think that’s going to happen? I guarantee you OMB doesn’t either.
On the other hand, the projections of basic economic conditions in the nearer term are actually surprisingly (to me at least) downbeat. The administration now expects unemployment to remain high throughout the remainder of the Obama presidency and expects economic growth over the coming decade to average less than 3% (not even reaching 2.5% in the out years). Their projections for the near future are significantly less optimistic than last year’s.
And this is so despite very rosy projections about the effects of Obamacare, which this budget naturally assumes will roll out perfectly and have precisely the effects its champions assert.