When Will President Obama's Budget Balance? Never.
February 15, 2012
When Will President Obama's Budget Balance? Never.
(WASHINGTON) – On Wednesday, Jeffrey Zients, Acting White House Budget Director, appeared before the House Budget Committee. Mr. Zients was in attendance in order to defend President Obama's proposed $3.8 trillion budget for the fiscal year that begins October 1, 2013. Congressman Huelskamp, a member of the Committee, used the opportunity to ask President Obama's chief budget officer about the impact of the President Obama's budget on the debt. According to the numbers included in the President Obama's budget, gross federal debt is expected to grow to more than $26 trillion in the next decade, up from $10.6 trillion on January 20, 2009. Mr. Zients attempted to argue that President Obama's proposed budget "stabilizes" the debt, even if it adds trillions more to the debt. A select transcription of the hearing can be found below.
After the hearing, Congressman Huelskamp added: "Mr. Zients danced around the issue, never answering the fundamental question: 'When will President Obama's budget balance?' Since he did not respond to the question, I will: the answer is 'never.' Americans want a balanced budget and to stop adding to the debt. It is not enough for President Obama to merely slow the addition of debt. When America is headed off the cliff, it does not matter how much pressure is put on the gas pedal. Finally, though Mr. Zients was unable to answer the entirety of my questions today, I look forward to his office's prompt response of questions we will send him."
Congressman Huelskamp continued: "President Obama is clearly misleading and manipulating America. Although he had pledged to do so, he came nowhere close to cutting the deficit in half by the end of his first term. In fact, not only will he miss that goal by a long shot, but even with the massive tax increases at the end of this upcoming year, the President's budget still includes massive deficits and enormous additions to the debt. Any claim that this budget 'makes progress' is deceptive, irresponsible, and an empty campaign talking point."
Key excerpts from the hearing:
Congressman Huelskamp: Going through the budget...if you had to pick one thing as the absolute highlight of this budget, what would it be? What are you most proud about in this particular budget?
Mr. Zients: I think it's the combination of investing in the short-term to make sure that we put people back to work, and at the same time putting us on a sustainable path by getting our debt and deficits under control...it's the combination, doing both at once. It's not an either-or.
Congressman Huelskamp: You didn't answer the question earlier about exactly when do we balance? When I visit with constituents, they're worried about a deficit, but more importantly they're worried about the debt. They understand the math. Until you do not have a deficit you cannot propose to pay down the debt. When does the President propose to actually reduce the debt on America?
Mr. Zients: Well, he stabilizes the debt in this budget. And, this budget makes major progress. The President looks forward working with both houses to continue to bring down our deficits and bring down our debt.
Congressman Huelskamp: What year does he actually stabilize the debt? That would suggest there is a year in which this budget will balance.
Mr. Zients: 2018
Congressman Huelskamp: That's when the budget will balance?
Mr. Zients: That's when the debt stabilizes in 2018 as a percent of GDP...You have to think about it that way.
Congressman Huelskamp: The President does not propose to actually balance the budget, is that correct?
Mr. Zients: We are not at a point in this budget window that where we are balancing the budget. This takes us a significant step toward that, and then we need to work together to drive toward a balanced budget.
Congressman Huelskamp: So there's no balanced budget in the next 10 years, correct? But looking long-term – it's the question I get from constituents. They say, when will Washington, instead of talking about a balanced approach, actually give us a balanced budget? Can you foresee how many years or decades that might occur?
Mr. Zients: I don't think any of us can project out that far. What I can tell you is that this budget makes significant progress, we bring down our deficits to below 3% of GDP. We stabilize our debt as a percent of GDP. That's a major milestone. There's more work to be done.
Congressman Huelskamp: In the next ten years, how much more debt is added to the bottom line in this President's budget?
Mr. Zients: Again, I don't think you should think about it in nominal terms.
Congressman Huelskamp: What is the nominal term? Humor me, if you would, please.
Mr. Zients: The debt held by the public is currently in 2012 about $11.6 trillion. And, in 2022 [it is] $19.5 [trillion]. [Note to readers: the gross federal debt – inclusive of debt held by the public and intra-governmental holdings – is much higher.]
Congressman Huelskamp: So to you stabilizing the situation is just adding debt, but not as quickly? This President is comfortable with never having a balanced budget maybe in the next twenty to thirty to forty years?
Mr. Zients: I think what we're talking about is making serious progress in a period of time when you can actually talk about progress. Who knows what happens across thirty, forty, fifty years of time. We're making that progress. We're making that progress while we maintain that basic compact we have with our citizens.
Congressman Huelskamp: I hope your staff will project what the Administration would like to see. Give us a date when we would have a balanced budget...but actually spend less in one year than what we are taking in? That has not happened in decades...What part of the budget – in particular in president's tax increases – actually creates jobs? I wish your staff would get back to me and identify, which one of these tax increases would actually create jobs. I'm concerned about jobs.
Mr. Zients: I think in terms of the medium term, having a balanced approach to deficit reduction. [Time ends.]