Obama: Federal Gov Will Increase Budget (and Debt) by 7% Next Year


Written by Rick Moran

President Obama wants to toss the sequestration agreement he made with Republcians in 2011 and is proposing an increase of at least $68 billion in the FY 2016 budget.

As imperfect as it is, sequestration has been partly successful in reigning in government spending. It could have worked better if Congress wasn’t always carving out exemptions. But there’s no doubt that there are tens of billions of dollars that would have been spent without it.

With tax receipts at an all time high, rather than applying that money to reducing the deficit, the president – as every Democratic president before him – will take the increased revenue and find something to spend it on.


The new spending would mean as much as $34 billion each for the national security and domestic sides of what will be a budget of almost $4 trillion. It will be detailed in the budget proposal Obama will send to Congress on Feb. 2.

That amounts to an almost 7 percent increase over discretionary-spending levels prescribed by automatic cuts known as sequestration voted into law in 2011, according to the people, who asked for anonymity because the budget plan hasn’t been released.

It’s a bold move at a time when many Republicans in Congress say they are eager to make deeper cuts in spending and are invigorated by a November election in which they expanded their House majority and gained control of the Senate.

“I think there might some bipartisan opposition” to the new spending, said Don Stewart, a spokesman for Senate Majority Leader Mitch McConnell, a Kentucky Republican. Senate and House Republicans are meeting at a policy retreat today in Hershey, Pennsylvania.

It’s not yet clear whether Obama will seek to offset the spending increases with revenue or cuts elsewhere in the budget. The additional funding would put the bottom line for discretionary spending at about $1.08 trillion for fiscal 2016.

Obama is asking for the extra spending at the same time he has been highlighting an improving government balance sheet.

The budget deficit has been shrinking in recent years as the economy strengthens, hiring picks up and company profits improve. The shortfall in the fiscal year that ended Sept. 30 was $483 billion, or 2.8 percent of gross domestic product, down from a record $1.42 trillion in 2009.

Third-ranking House Republican Steve Scalise of Louisiana said Thursday in Hershey, “We need to work on getting our budget back to balance and start living within our means.” A 7 percent increase in spending, he said, “doesn’t do that.”

House Speaker John Boehner’s spokesman, Cory Fritz, said in an e-mailed statement, “President Obama just can’t wait to try and spend more money Americans don’t have.”

In other words, now that we’ve “reduced” the deficit to a half a trillion dollars, let’s go on a spending binge.

The president is apparently not taking into account the Fed’s plan to raise interest rates by mid year. Rising interest rates will mean tens of billions of dollars in additional debt servicing. Add that to the extra $68 billion in spending the president is proposing.

Obama is ignoring the results of the mid term elections. But will Democrats in Congress follow his lead? Some Democrats were chastened by the election results and will probably be more cautious in supporting grandiose government schemes to “transform” America. This will be especially true if it looks like the president’s proposals will add to the deficit.

Republicans have their own plans for the next year, and they don’t include raising federal spending beyond a modest increase in defense expenditures. There are also plans to cut taxes – as long as they can match any tax cuts by cutting spending or closing loopholes. With the two sides so far apart, Obama isn’t likely to be successful in his efforts to increase spending – as long as Republicans hold the line. Given the proposals the president will be pushing, that shouldn’t be too difficult.

This article was originally posted at the American Thinker website.