The White House Office of Management and Budget this week released its Mid-Session Review of the budget submitted to Congress by the president in February. The 65-page document claims that the administration’s policies have helped stabilize the nation’s fiscal condition by slashing the deficit and creating a plan to stabilize the it as a share of the country’s Gross Domestic Product.
OMB projects the 2015 deficit will be $455 billion, a reduction of $128 billion below the original estimate. It’s expected to fall to as low as 2.2 percent of GDP by 2018 before beginning to climb again. OMB additionally estimates that the deficit will stabilize at 2.7 percent of GDP in five to ten years.
The White House’s deficit triumphalism is a bit ironic, given the fact that much of the reduction the OMB report trumpets is the result of across-the-board spending cuts known as sequestration, which became law as part of the Budget Control Act of 2011. The White House has very publicly indicated that wants to do away with those cuts in future budgets.
Budget hawks, including economists from the Committee for a Responsible Federal Budget, were unimpressed with the OMB report, essentially grading the current outlook as “better than nothing” but not particularly good.
“Overall, the MSR doesn't really change the outlook for the President's policies,” CFRB said in a release. “They are an improvement over the status quo but don't do enough to ensure debt is on a clear downward path as a share of GDP over the long term. The budget would need to go further, particularly on entitlement reform, to accomplish that.”
The MSR spends a considerable amount of time criticizing Republican Congressional budget proposals, particularly their adherence to the sequester.
The Republican plan, according to the White House, “would lock in the mindless austerity of sequestration and weaken America’s economy at a time of accelerating growth.”
The MSR also takes the GOP to task for a budget gimmick that allows the budget sequester to fall on domestic spending programs, but not the military. The proposal would funnel billions of dollars to the military through an off-budget account for Overseas Contingency Operations, which is not supposed to be used for normal defense spending.
“This approach fails to provide the stable, multi-year budget on which defense planning is based, undermines a mechanism meant to fund incremental costs of overseas conflicts, and locks in unacceptable funding cuts for national security activities at non-defense agencies such as State, USAID, and Homeland Security.”