WASHINGTON --- President Obama's budget relies on a commission without teeth to help his administration wrestle the deficit. It forecasts stronger economic growth than most economists expect and calls on Congress to cut programs that lawmakers cherish. All White House budgets are leaps of faith of some sort. This one is no exception. A look at some budget assumptions and how they compare with reality:
BUDGET: Forecasts four years of growth of 4 percent or more and unemployment dropping to 8.2 percent in 2012.
THE FACTS: The administration's projections are rosier than private economists expect.
For 2010, the administration is projecting that the overall economy, as measured by the gross domestic product, will grow at an annual rate of 3 percent from the fourth quarter of last year. Economists surveyed by Blue Chip Economic Indicators forecast a 2.9 percent GDP growth.
But the administration is projecting growth in 2011 will jump to 4.3 percent and remain above 4 percent for three years. The Blue Chip consensus is for growth to be around 3.1 percent in 2011.
The administration's projection that unemployment, currently 10 percent, will end the year around 9.8 percent is in line with most economists' outlook. The administration is projecting the rate will drop to an average of 9.2 percent next year and will average 8.2 percent in 2012. Private economists don't believe the rate will improve that quickly.
BUDGET: Save some $20 billion by cutting programs.
THE FACTS: Congress typically disregards most items on a president's budget-cutting wish list and puts money into the programs anyway. Several dozen programs Obama proposes cutting now were marked for elimination in his budget last year.
Obama got more than usual on this front in 2009, persuading Congress to go along with more than $6 billion in cuts out of the $17 billion he sought. But he achieved those savings from just a few big-ticket programs.
This time, there are fewer massively expensive programs on the list, and it will be a battle trying to get lawmakers to back off on spending for their states.
Although supporting major military systems this time, Obama wants to save $2.5 billion by stopping purchases of the C-17 cargo plane. The Pentagon tried to cease production of it before, but lawmakers restored the money to save jobs in their states.
BUDGET: A commission to help reduce the deficit to 3 percent of the overall economy. This year's projected record-breaking $1.56 trillion deficit would equal 10.6 percent of GDP.
THE FACTS: The commission hasn't been formed and there's no sure path to having its recommendations considered by Congress. Even with its partial budget freeze and tax increases on the wealthy, the administration would not achieve its goal of getting the deficit down to 3 percent of GDP, only reaching 3.9 percent by 2015. Achieving that last one percentage point would be the commission's job.
But the idea of establishing the commission by law failed last week when senators in both parties opposed it.
The Augusta Chronicle ©2012. All Rights Reserved.
