NCPA - National Center for Policy Analysis

Can the Budget Ever Be Cut?

July 9, 2013

Portrayed in the press as a great compromise between the austere budget of House Budget Committee Chairman Paul Ryan (R-Wisc.) and the excessive spending and high taxes proposed by Senate Budget Committee Chairwoman Patty Murray (D-Wash.), the president's budget is actually neither conciliatory nor moderate, says Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University.

When evaluating budget proposals, don't be hoodwinked by the long-term projections. The real deal is in the outlays for the coming year.

  • In fiscal year 2014 (which begins on October 1, 2013, and ends on September 30, 2014), the president wants to spend a spectacular $3.77 trillion, up from $3.6 trillion this fiscal year.
  • That's higher than the Ryan plan's proposed $3.53 trillion, and it's even higher than the Murray plan's $3.71 trillion.
  • In other words, the president outspends all comers.

How about the long-term spending path? All three budgets expand the burden of government spending during the next decade; the difference between them is one of magnitude.

The Obama and Murray budgets dole out money at a remarkably similar pace.

  • The Murray plan increases spending to $5.68 trillion by fiscal year 2023, while Obama hikes spending to an almost identical $5.66 trillion.
  • Cumulative figures over this period show Obama slightly outspending Murray, $46.5 trillion to $46.3 trillion.
  • By contrast, Ryan's plan increases spending from $3.53 trillion in fiscal year 2014 to almost $4.95 trillion in fiscal year 2023, for a grand total of $41.4 trillion during the period.
  • Even though this is still too much, the Ryan plan looks like fiscal discipline compared to the Democrats' proposals.

Revenue projections in all three budgets are equally laughable. They all accept as a starting point that the government will be able to more or less double tax revenue during the next 10 years.

  • Data from the Office of Management and Budget going back to 1980 shows that the historical path of federal taxation averages roughly 18 percent of gross domestic product.
  • If we go back to the 1930s, that number falls to 16.4 percent.
  • Yet all three budgets assume that revenues can reach the high level of 20 percent by 2023.

Source: Veronique de Rugy, "Can the Budget Ever Be Cut?" Reason Magazine, July 2013.


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