Long gone are the days when former Alabama Governor George Wallace could say there is not a dime’s worth of difference between the two parties. As their recently budget proposals confirm, the two parties are hurtling in opposite directions at an accelerating pace.
President Obama’s proposed budget for the next fiscal year wants to increase federal spending over the next ten years by more than 75 percent, or $2.7 trillion, from $3.5 trillion in 2014 to a record smashing $6.165 trillion by 2025. He proposes to spend an all-time record $50 trillion over those ten years.
The Republican budget proposal developed by new House Budget Committee Chairman Tom Price and adopted by the entire Republican House reduces spending growth over the ten years by $5.5 trillion. For the single year of 2025, President Obama actually proposes to spend over a trillion dollars more than Tom Price’s House budget does, and more than $7 trillion more over the next decade.
President Obama proposes in his budget to increase taxes by more than 80 percent from 2014 to 2025, or a whopping $1.8 trillion over the next ten years. Chairman Price proposes no tax increase at all over that period.
But Price’s House Republican budget proposes nevertheless to balance the budget within eight years, as officially scored by CBO. Despite President Obama’s proposed tax increases, his budget, as scored by CBO, never reaches balance.
After ten years under his proposed budget, Obama’s deficit grows back to $687 billion, higher by far than any deficit by any president before him, even during World War II, when a Democratic president and Congress were leading America to victory over Nazi Germany and Imperial Japan. The highest deficit under any President before Obama was $458 billion in 2008, under President Bush, who looks like a penny pusher by comparison.
The reason Obama’s deficit grows back to nearly $700 billion under his budget is that he proposes to grow federal spending after ten years to 22.2 percent of GDP, making the federal government about 10 percent bigger relative to the economy than the relatively stable, long-term, postwar average of nearly 20 percent of GDP.
As a result, debt held by the public grows under Obama’s proposed budget from $12.78 trillion in 2014 to over $20 trillion ($20.371) by 2025, a nearly 60 percent increase in just ten years. Gross Federal Debt would grow from $17.768 trillion in 2014 to an all-time record $26.242 trillion in 2025, nearly 100 percent of GDP by then.
By contrast, under the budget proposed by House budget chairman Tom Price, and adopted by the whole Republican House, the budget is balanced by 2024, with exactly zero added to the national debt after that. By 2025, debt held by the public is $5 trillion, or 33 percent, higher under Obama’s budget than Price’s Republican budget. Under Price’s budget, the national debt is on a path eventually to be paid off entirely.
Chairman Price’s budget increases national defense spending from $564 billion in 2016 to $683 billion by 2025. While Price was criticized for hiding about $90 billion in defense spending in an Overseas Contingency Fund, doing so allowed him to increase essential defense spending without busting the spending caps for everything else.
Price’s Republican budget saves $2 trillion over ten years by repealing Obamacare in its entirety, replacing it with Patient Power and control over health care. Along the way, his plan repeals the unworkable $700 billion in cuts that Obamacare imposed on Medicare. Price instead extends the market reforms that have worked so well in Medicare Parts C and D to Medicare Parts A and B, saving $148 billion over ten years.
Price saves more than $1 trillion more, as scored by CBO, by extending state control over Medicare and Food Stamps, restoring the federalism originally established by our Founding Fathers.
Price also supports the tax reform under development by new House Ways and Means Chairman Paul Ryan, based on just two rates, 10 percent on the first $100,000 a year in family income, and 25 percent on income above that. The Republicans are consequently on track to succeed President Obama with lower federal tax rates than Reagan left us with.
