5 Things to Know About President Obama’s Budget Proposal

The most important thing to know about President
Obama’s budget proposal is that it won’t go anywhere. It’s not
intended to, and the White House isn’t even bothering to pretend
otherwise.

Instead, it’s an election-year wish list—or, if you prefer the
White House’s gentler spin, a statement of values. “Our budget is
about choices, it’s about values,” President Obama
said earlier this week. Here are a few of the choices his
budget would have the nation make.

Annual spending would rise. Outlays would
grow
from $3.9 trillion in 2015 to $5.91 trillion in 2024. In theory,
the growth would be roughly commensurate with growth in the
economy, ticking up just slightly from 21.4 percent of GDP to 21.5
percent over the course of a decade. But the White House has been

coy with details about its assumptions regarding the projected
growth rate of the economy, so it’s hard to assess this beyond face
value.

Tax revenues would rise as a percentage of the
economy. Obama’s budget would raise revenue levels closer
to spending levels in order to sustain the spending while reducing
annual deficits. Revenues would rise from $3.34 trillion, or 18.3
percent of the economy, in 2015 up to $5.48 trillion, or 19.9
percent of the economy, in 2024. That would be one of the highest

annual levels in the nation’s history. 

The national debt would become even bigger.
Annual deficits would decrease, according to administration
projections, dropping down to 1.6 percent of the economy, thanks in
large part to increased tax revenue levels that partially close the
gap between collections and spending. But even smaller annual
deficits still add to the federal tab. Over the next decade, the
president’s budget plan would leave us with a debt that’s $8.3
trillion higher than it is now.

Growing debt would lead to bigger interest
payments. This year, we’d spend $223 billion on debt
service. By 2024, the president’s proposal projects interest
payments of about $812 billion.

The budget would never, ever balance. The White
House even seems to have given up its old
line about getting the budget into “primary balance”—a
technical annual balance that ignores the cost of carrying a heavy
debt load. (According to the Congressional Budget Office, the old
budgets
never reached primary balance either.)