By Erik Wasson - 05/17/13 06:13 PM EDT
The non-partisan Congressional Budget Office on Friday said President Obama’s 2014 budget proposal would add $5.2 trillion in deficits over 10 years.
The agency said that compared to its baseline scenario, the Obama budget would reduce projected deficits by $1.1 trillion over 10 years. The White House had claimed $1.8 trillion in savings using its own analysis.
The CBO's baseline assumes that automatic sequestration cuts remain in place
for nine years, whereas the White House assumes they are eliminated.
While it uses a different budget baseline than the White House, the analysis of individual proposals are broadly consistent with what Obama officials projected. The CBO reports $3 billion more in spending than the White House claimed and $79 billion more in revenue over 10 years.
The vast majority of deficit reduction in the Obama plan comes from increased tax revenue, according to the CBO. Compared to the budget baseline, the Obama plan adds $974 billion in revenue while cutting spending by $80 billion and interest payments by $92 billion.
On the most controversial aspect of the budget, the CBO projects $233 billion in savings from changing the way inflation is calculated for Social Security and other federal benefits.
In good news for Obama, the report said that under his plan the federal debt held by the public would decline from 73 percent of the economy to 70 percent, or $18.1 trillion in 2023. That is lower than the CBO baseline, where debt remains at 74 percent of gross domestic product in 2023.
The Obama budget arrived on Capitol Hill in April, two months late and after both the Senate and House had passed their own budgets.
The White House said Obama's budget demonstrates his willingness to cut a budget deal with Republicans by including less tax increases than the Senate blueprint along with cuts to entitlement benefits that many Democrats oppose.
The White House in April said Obama's $3.77 trillion 2014 budget blueprint would reduce the deficit by $1.8 trillion over 10 years, including by raising more than $580 billion in new taxes from top earners.
"The numbers work," Obama said. "There's not a lot of smoke and mirrors in here."
Republicans say that when gimmicks are removed, the budget only reduces the deficit by $119 billion over 10 years, while adding new taxes — including higher taxes on tobacco and on estate transfers — totaling $1.1 trillion.
House Budget Committee Chairman Paul RyanPaul RyanIncomes are rising, but don't trust GOP to make it a trend GOP lawmakers slam secret agreement to help lift Iran bank sanctions 9/11 bill is a global blunder that will weaken US efforts abroad MORE (R-Wis.) said the CBO report shows Obama's budget does not do enough to cut spending or rein in the debt.
“This new report shows that the President’s budget doesn’t come close to solving the problem. The federal government will take in a record haul over the next ten years. And the President wants yet another massive tax hike. But under his plan, we’ll keep adding to the debt—at an alarming rate," Ryan said.
The House-passed Ryan budget balances in 10 years without raising taxes. Democrats say it makes draconian cuts to social services and investments in infrastructure and research.
House Minority Whip Steny Hoyer (D-Md.) said in a statement that the CBO analysis shows Obama's budget is the right approach and that it cuts the debt more than the proposal of his fiscal commission.
“Today’s analysis of the President’s 2014 Budget from the Congressional Budget Office confirms that the President’s proposed budget will substantially reduce the deficit and stabilize the debt below the level recommended by the Bowles-Simpson Commission," Hoyer said.
"This is an important validation of the President’s and Democrats’ efforts to restore fiscal discipline through a big and balanced approach while maintaining our ability to invest in a competitive economy and a growing middle class."
--This report was updated at 3:46 p.m. and 5:15 p.m.