New estimate: Obama budget would add $6 trillion to federal debt

The 10-year federal budget analysis released on Thursday by the nonpartisan Congressional Budget Office (CBO) concludes that President Obama’s long-term spending plan will initially reduce the deficit further but add $6 trillion to the overall federal debt over a decade.

According to The Hill, this conclusion is slightly more than the $5.7 trillion shortfall that the president's budget office projected for the 10-year window, but the CBO estimate is less than the $6.6 trillion it said the president's previous budget would add to the deficit over 10 years.

However, Obama’s budget projects savings of more than $300 billion through House passage of comprehensive immigration reform, slower spending in Medicare, and less-than-expected expenditures on military operations overseas, including the ongoing Pentagon efforts in Afghanistan.

The GOP-controlled Congress is certainly not likely to comply with those proposals, and they will cast aside the White House’s call for a $526 billion increase in revenues (again) by limiting the tax exemptions and deductions for the wealthy.

At the same time, the Center for Budget and Policy Priorities (CBPP) warns that the Republican versions of the budget that will emerge in the House and Senate could force major cuts in programs for low- and middle-income Americans if no new revenues are put on the table.

According to the CBPP, press reports suggest that the resolutions will likely be shaped in substantial part by two fiscal goals:  balancing the budget over the next ten years, which would likely require roughly $4.5trillion in policy savings, and using no new revenues to help achieve those large savings.  The combination of these two goals has large and serious effects, making it highly likely that the forthcoming Republican budgets will be built around policies that would increase poverty and inequality and adversely affect many low- and middle-income families.

Obama’s budget called on Congress to breach sequestration spending limits for at least the next fiscal year.

The Committee for a Responsible Federal Budget reports that the CBO projects annual deficits would fall from $486 billion (2.7 percent of GDP) in 2015 to $380 billion (2.0   percent of GDP) in 2016 before rising in every subsequent year to over $800 billion (2.9 percent of GDP) by 2025. Both spending and revenue will be growing as a share of GDP over this period, but spending will increase slightly faster, from 20.5 percent in 2015 to 22.1 percent in 2025, while revenue will  rise from 17.8 percent to 19.2 percent. These increases are the result of both current law trends and policy changes proposed in the president’s budget.

Republicans declared Obama's blueprint—the second-to-last of his presidency—dead on arrival because of the spending and tax hikes. 

GOP lawmakers in the House and Senate are scheduled to mark up separate budget blueprints next week and vote on them the last full week of March.