The Budget: When President Obama released his first budget plan in 2009, he called it a “New Era of Responsibility.” What he produced was irresponsibility on a historic scale.
“Government has failed to fully confront the deep, systemic problems that year after year have only become a larger and larger drag on our economy,” Obama said in his inaugural budget plan, promising to make “the tough choices necessary to … put our nation on sound fiscal footing.”
Seven years later, a new Congressional Budget Office report reveals that Obama will bequeath chronic and rising deficits, rapidly expanding debt, and exploding health care costs to his successors.
First, there’s the deficit, which the CBO says will top $1 trillion in six years, and continue climbing. Over the next decade, deficits will total more than $9 trillion. The CBO’s outlook has worsened significantly since its last forecast, mainly because it expects the economy to grow more slowly.
Debt held by the public will nearly double over the next decade, the CBO says, going from close to $14 trillion this year to $23.8 trillion in 2026. By that year, debt will equal more than 86% of the economy.
“Such high and rising debt would have serious negative consequences for the budget and the nation,” the report notes.
And while Obama had promised that his health care reform would “bend the cost curve down,” it has instead turbocharged federal spending on health care. In fact, in 2015, for the first time ever, federal spending on health care programs exceeded Social Security spending.
The CBO says that Medicare, Medicaid, ObamaCare and other health program costs climbed 13% last year, are expected to go up another 11% this year and double over the next decade. ObamaCare’s annual subsidy cost will hit $109 billion by 2026. By 2026, health spending will account for nearly a third of all federal spending.
The report also shows the grim state in which Obama will leave every major federal entitlement program.
This year, Social Security, Medicare’s Hospital Insurance and the federal Disability Insurance program are expected to run deficits totaling $83 billion. These annual shortfalls will continue to climb as baby boomers retire, to the point where Social Security’s red ink will hit $346 billion by 2026; Medicare’s Hospital Insurance deficit will be $68 billion that year; Disability Insurance, $48 billion.
Obama’s own deficit commission urged him to tackle entitlements. And he had the chance to work with the GOP to do so. Instead, he decided to demagogue the issue.
The CBO report also makes clear that Obama’s tax hikes have been swamped by out-of-control spending.
Revenue as a share of GDP will be slightly above 18% over the next decade, which is higher than the 17.4% average for the previous 50 years.
But federal outlays — which averaged 20% of GDP over the previous 50 years — will climb from an already high 21% this year to 23% by 2026. Worse, almost two-thirds of the entire federal budget will go towards entitlement programs.
Not only did Obama not solve any of the problems he promised to, he’s also made all of them worse. This isn’t the legacy Obama and his supporters will brag about. But it is the legacy that future presidents will have to confront.