The Obama Administration released the “final installment” of their FY2010 budget today. The summary tables can be found here. OMB director Peter Orszag explains what’s changed from the February release on his blog today. Although the Administration has not revised the economic assumptions that go into the budget projections since their February release, they’ve still had to adjust downward their revenue forecast due to so-called “technical revisions”:
The change in the deficit estimates [compared with February, about $90 billion higher in each of FY2009 and FY2010, yet on net only about $140 billion higher for the full ten-year period] reflects upward technical revisions in light of new information regarding the collection of receipts, financial stabilization efforts, and other federal programs. (Technical revisions reflect additional data on, or expected changes in, government receipts or expenditures, other than because of changed assumptions about major macroeconomic variables such as the size of the economy, the rate of inflation, or the unemployment rate. The latter are called economic revisions.) Treasury now estimates that overall federal revenue will be less than was projected in February by between $30 billion and $50 billion in each of this year and next [and $124 billion lower over ten years, from Table S-8].
[Note from the same table (S-8) that the technical changes increase deficit spending and the associated net interest, which is now $193 billion higher (from these technical changes alone) over ten years.]
As a result of these technical revisions, the Administration has (already) had to look for a new source of revenue for the health reserve fund beyond the original proposal to limit itemized deductions (emphasis added):
Health reserve fund. The Administration has made a historic commitment to health reform by putting on the table $635 billion in savings to be devoted to paying for health reform this year. The health reserve fund is almost exactly the same size as it was in the in the February overview and is still about evenly divided between Medicare and Medicaid savings and additional revenue. But, as I have discussed elsewhere, the composition of the additional revenue measures has now changed somewhat, with the addition of new enforcement measures and loophole closers to make up for technical re-estimates of the original proposal.
It’s sort of like looking for spare change under the couch cushions, when what you really need to do is get off the couch and find a higher-paying job–and you don’t even know if you can count on hanging onto your lower-paying one. (It’s not like the proposal to limit itemized deductions has no other problem besides not raising as much revenue as we previously thought it might.)
And speaking of the one-year anniversary of this blog (today!)… That’s definitely one of the big fiscal-policy lessons I’ve learned in the past year while writing this blog. Changing policymaker and private citizen attitudes about the need to raise more revenue, and how to best accomplish it, is very hard to do–even with a new president who was elected to bring “change” (speaking of “spare change”).