NCPA - National Center for Policy Analysis


March 18, 2009

During his presidential campaign, President Barack Obama promised the American people a "net spending cut."  Instead, he signed a "stimulus" bill that spends $800 billion, says Brian M. Riedl a researcher with the Heritage Foundation.

The proposed a budget would:

  • Increase spending by $1 trillion over the next decade.
  • Include an additional $250 billion placeholder for another financial bailout.
  • Likely lead to a 12 percent increase in discretionary spending.
  • Permanently expand the federal government by nearly 3 percent of gross domestic product (GDP) over pre-recession levels.
  • Raise taxes on all Americans by $1.4 trillion over the next decade.


  • Raise taxes for 3.2 million taxpayers by an average of $300,000 over the next decade.
  • Call for a pay-as-you-go (PAYGO) law despite offering a budget that would violate it by $3.4 trillion.
  • Assume a rosy economic scenario that few economists anticipate.
  • Leave permanent deficits averaging $600 billion even after the economy recovers.
  • Double the publicly held national debt to over $15 trillion ($12.5 trillion after inflation).

Before the recession:

  • Federal spending totaled $24,000 per U.S. household.
  • President Obama would hike it to $32,000 per household by 2019 -- an inflation-adjusted $8,000-per-household expansion of government.
  • Even the steep tax increases planned for all taxpayers would not finance all of this spending: The President's budget would add trillions of dollars in new debt.

The President's budget may even understate future spending and deficits.  It assumes that the temporary stimulus spending provisions will be allowed to expire and that the $634 billion down payment on universal health care will not be expanded.  It proposes destructive income tax increases and a new cap-and-trade energy tax that could devastate the manufacturing sector.  Yet, somehow, the budget assumes much faster economic growth than forecast by the Congressional Budget Office (CBO) and the Blue Chip Consensus.

Overall, the President's budget represents a sharp break from the policies that created the most prosperous 25-year period in American economic history.  Instead, it puts politicians in charge of an increasing portion of the economy.  Congress should discard this tax-and-spend budget and start from scratch, says Riedl.

Source: Brian M. Riedl, "The Obama Budget: Spending, Taxes, and Doubling the National Debt," Heritage Foundation, Backgrounder No. 2249, March 16, 2009.


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