Obama why no budget

More Videos In , Obama tore into Paul Ryan's budget plan Like lame-duck presidents before him, Obama submitted a final budget that includes funding for his top legacy priorities, including combating climate change and expanding health insurance coverage. But while there's no doubt the overall effect would be to make federal taxes more progressive, it would also make the code even more insanely complicated.

Unfortunately, Obama's budget stops short of a comprehensive tax reform that would close loopholes for both individuals and corporations and use the added revenues to reduce rates for all taxpayers. Most economists believe that junking, or at least limiting, a host of special preferences and tax breaks would reduce economic distortions, promote more efficient use of capital, and generally make federal taxes fairer and simpler. Nonetheless, the president's proposals for reforming business taxes could be more appealing to Republicans.

Finally, the Obama budget does disappointingly little to reorient U. As Gene Steuerle, a veteran fiscal analyst writes in his invaluable book, " Dead Men Ruling ," decisions made by dead or retired politicians have radically constrained contemporary lawmakers' freedom of action.

For most of U. But now, says Steuerle, the cost of maintaining the government's cumulative commitments exceeds expected revenues. Congress, in short, is wearing fiscal handcuffs.

Lawmakers can't launch fresh initiatives to tackle contemporary problems without either piling on new debt or reneging on old commitments to spend more, or tax less. Conversly there is little Congress can do without the president's signature or a veto-proof supermajority. Further, during most of Obama's term to date, control of Congress was split between a Democratic Senate and a Republican House. Both branches share blame, both for legislation that increased the debt and for failing to enact legislation that would curb the debt growth that was already projected to occur from the growth of entitlement programs and insufficient revenues.

By a few metrics, debt has doubled during the Obama presidency. The blame though is not only on him because some of the debt increase over the past eight years was already expected to occur, and Congress had to approve bills that increased the debt. The costs of inaction are high. There is no plausible way to pay for these escalating costs. The future entitlement Armageddon is no secret. Unfortunately, the can was kicked down the road. Other than some modest Medicare reforms, [26] entitlement spending continued to rise during the Obama years.

White House requirements for trillion-dollar tax increases were accompanied by smaller entitlement concessions that would trim only a small fraction of the long-term entitlement liabilities. That said, Obama conceded more spending reforms in these negotiations than congressional Democrats were comfortable with, which was not without political risk.

Similarly, the House Republican leadership likely conceded more tax revenues than the House Republican majority would have accepted. Overall, the failure to complete a deal putting entitlements on a sustainable path was the largest fiscal failure of the Obama era.

Tax-cut extensions also produced a larger national debt than if they had been allowed to expire. Essentially, lawmakers who refused to confront escalating Social Security and health entitlements have begun cutting the rest of the budget. Lawmakers will eventually run out of other programs to cut or eliminate. Figures 7 and 8 show other notable budgetary developments between and , which include:.

Ultimately, temporary tax policies have finally been made permanent; taxes have been increased on upper-income families, small businesses, and smokers; and new health-related taxes have been enacted to pay for the ACA. Bush but 0. Mandatory spending is about 0. The real driver of lower than projected federal spending is the 0.

The historically low interest rates of the past several years are unlikely to persist because of: 1 continued Federal Reserve interest-rate increases toward more typical levels; 2 improvement from the current lethargic economic growth rate; and 3 a surge of new federal debt in the coming decades with interest effects that the official projections are underestimating.

When interest rates do rise, the budget will turn very ugly. The longer-term picture is even worse. Obama enacted a net spending cut over his final six years in office, largely due to a new Republican congressional majority rejecting his spending proposals and insisting on cuts.

The ACA is not adding to the deficit at this point, yet it is using up valuable offsets that could have extended the life of Social Security or Medicare. The overall cost of the Obama presidency was smaller than conservatives feared, although the failure to reform entitlements and the inevitability of rising interest rates could have catastrophic long-term consequences.

Political score-setting aside, the rapid deterioration of the federal budget picture since presents a huge challenge for the country. Several presidents and Congresses have understood this coming crisis but chose political expediency over the gradual phase-in of long-term reforms.

Current and future politicians will be judged on their response to this challenge. This analysis of the Obama fiscal record begins with the January CBO budget baseline that the incoming president inherited. CBO updates its rolling year projections three times per year and classifies all baseline movements into three causal groups: 1 legislative changes; 2 economic re-estimates that affected spending and revenues such as faster growth, raising tax revenues ; and 3 technical re-estimates of revenues or spending, such as updated projection models which are often secondary effects of economic changes.

One complication is that several scores existed for some bills—the final published score, an often unpublished post-enactment rescore for the next CBO baseline update, and JCT scores that did not always match CBO scores. I used the latest cost estimates when possible, although the post-enactment estimates often lacked a line-item breakdown and thus had to be reconciled with the earlier, more detailed, scores.

Some categories, like economic stimulus, required occasional judgment calls.