February 20, 2012
Absurd: Obama's FY2013 Budget Claims
Last week, President Obama unveiled the FY2013 federal budget, aka the "Vote for Me" budget. In several speeches, the President has talked about $2 trillion in cuts over 10 years, or roughly $200 billion per year. Unfortunately, when we examine the facts, a different picture emerges.
This is the fourth fiscal year of the Obama Administration. Let's have a look back at some of the projections that have been in the past (and current) budgets
In 2010, the FY2013 expense for Social Security was $797 billion, but now, it is projected to be $826 billion, or almost 4%.
In 2010, income security expense for FY2013 was projected at $478 billion. Now, it's projected to be $559 billion, which is $81 billion, or over 15% more.
The government is alleging that the ObamaCare legislation is going to save on healthcare, hence the decrease in some of the expenses. The government has estimated $60 billion less in expense in the FY2013 budget versus the 2010 estimate, however, early indication of the FY2011 results show only a $15 billion decrease between estimates and results.
Education spending is all over the place. It appears the Obama Administration has tried multiple initiatives to improve education, with limited results. The bottom line is that the below chart clearly doesn't show spending restraint.
The data speaks for itself on transportation. The government has apparently bloated the budget in some pipe dream to stimulate the employment market. This is despite the continued high unemployment rate amongst construction workers.
What It All Comes Down To
Somehow, despite these stats, the government is projected to spend $100 billion less in FY2013 than the FY 2010 budget projected ($3.8 trillion vs $3.9 trillion).
It turns out that the interest on the national debt is projected to be $300 BILLION LESS in FY2013 than the FY2010 projected. This is because of continued exceptionally low interest rates. If you remove interest on the debt, the government is actually spending $200 BILLION MORE.
Our federal budget is at the mercy of low interest rates, and in part, at the mercy of the Federal Reserve. A market shock that brings interest rates up could easily turn our $1 trillion deficit into a $1.5 trillion or $2 trillion deficit.
Overall, the President has failed to show fiscal restraint. We cannot find the $2 trillion in cuts that Bowles-Simpson made in any of the White House budget material. Politicians are telling one story and the numbers are telling another. Unfortunately for the American people, we are believing the former, while the latter cannot lie.
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