While available to Hill staff and press in physical form first thing this morning, President Obama’s FY2011 budget was not widely available until a few minutes ago – and even then, only through the Government Printing Office’s website. I’m sure it was unintentional, but it did slow down independent budget geeks (like me) from reviewing his latest proposals while Administration officials touted and shaped the early stories.
Nevertheless, here are some of my initial observations about the President’s budget:
OMB replaced the traditional “defense” vs. “non-defense” breakdown of discretionary spending with “security” vs. “non-security”. This has two impacts: First, it makes historical comparisons nearly impossible – no longer can anyone quickly flip through the budget to see how non-defense discretionary spending grew in the Obama Administration versus the Bush Administration (although that may be the point). Second, it will make it harder for future Administrations and Congress to freeze or trim the new agencies designated as “security” funding, including the fast-growing Departments of State and Veterans Affairs.
The White House economists continue to be optimistic about future GDP growth, albeit a bit more tapered than in the past. The White House foresees 2.7% growth for 2010, half a percent less than predicted for 2010 last year. For 2011, the White House envisions solid 3.8% growth (it previously predicted 4% growth). Beyond that, the White House predicts strong growth of over 4 percent for a couple of years – which is part of the reason the deficit plunges (relatively) in the mid-term. Make no mistake: The White House clearly does not expect a “double-dip” recession that many economist fear, which is why it’s able to cut the deficit a bit in the next few years. So if the economy does dip again, the deficit will explode in ways hard to fathom.
The President is spending a lot on war. For somebody who ran for president on an anti-Iraq platform, it’s remarkable how much President Obama is planning to spend waging war. His budget surges war spending from $130 billion this year to $159.3 billion in 2011. However, in spite of all his promises to honestly account for future war costs, the White House then foresees only spending $50 billion a year starting in 2012. Given the current trajectory of the war in Afghanistan, a two-thirds cut in war costs from one year to the next is pretty laughable. But it is also part of the reason why the budget deficit dips a bit in the mid-term.
Tags: afghanistan, budget, economics, White House
