Obama's 2011 Budget - Unwise

The CBO assesses the President's proposed 2011 budget.  And it doesn't look good.

Here's what the CBO found regarding the debt:

How about the deficit?

Measured relative to the size of the economy, the deficit under the President’s proposals would fall to about 4 percent of GDP by 2014 but would rise steadily thereafter. 

By 2020, the deficit would reach 5.6 percent of GDP.

And mandatory outlays?  Here's the real problem with the CBO estimate - it doesn't incorporate (and probably can't accurately forsee) the coming realities of the post-health care bill landscape.  Instead, it adopts what are no doubt optimistic placeholder numbers put forward by the administration as far as revenues and mandatory outlays due to the legislation:

Health Care Legislation. 

The proposal to expand health insurance coverage and make other changes to the health
care system would have the largest effect on mandatory spending. The Administration estimates that such legislation would increase mandatory outlays by $6 billion in 2010 and by $593 billion from 2011 through 2020—about $150 billion less than the added revenues assumed to result from such legislation. As in the case of revenues,that estimate of outlays is a placeholder calculated by the Administration that CBO has incorporated in this analysis.

The administration seems to be in denial.  Spending is not they way forward.  We need to sober up and get our fiscal house in order.

Also of note...Obama's budget proves Paul Ryan was on to something when he called for the CBO to do one final estimate before the health care vote.  One of the CBO's presumptions in scoring the Democratic version of the bill was that Medicare rates would go down as planned - an unrealistic presumption.

Obama's budget shows its unrealistic.  The budget proposed calls for the "doc fix" when it comes to Medicare reimbursement rates.  He proposes restoring and keeping those rates at 2009 levels through 2020, something Nancy Pelosi et. al carved out of the health care bill to avoid splashing red ink on the legislation.  It's going to cost a good deal:

Medicare’s Payment Rates for Physicians. Under current law, Medicare’s payment rates for physicians’ services are slated to be reduced by 21 percent beginning in April 2010, by about 6 percent in 2011, and by about 2 percent a year for most of the rest of the decade. The President proposes to avoid those reductions by freezing the payment rates at the 2009 levels through 2020. The higher payments to physicians that would result under the proposal (relative to those under current law) would increase outlays by $5 billion in 2010 and by $286 billion from 2011 to 2020.

This budget, in my mind, fails because it so closely resembles the George W. Bush approach you often saw in the former President's State of the Union addresses - a desire to hand out a little bit of everything to everyone.  A detachment from the reality of finite resources.  And limited government.  It's not sustainable, it doesn't get us on the road to sustainability, and it doesn't even attempt to appear to be making hard choices in hard times.