02.10.16

Overview of President’s FY 2017 Budget Proposal

WASHINGTON, DC – The Senate Budget Committee today released its first in a series of analyses of the President’s FY 2017 Budget submission. The February 10, 2016, Budget Bulletin is focused on an overview of the President’s fiscal year 2017 Budget Proposal. The Budget Bulletin provides regular expert articles by Senate Budget Committee analysts on the issues before Congress relating to the budget, deficits, debt, and the economy.

Read the full Senate Budget Bulletin here.

Excerpts follow:

Overview: Higher Spending, More Overspending

President Barack Obama’s FY 2017 budget spends $52.6 trillion over the budget window and would increase annual spending by $2.5 trillion in 10 years. His plan collects $46.5 trillion in taxes over the budget window, which includes $3.4 trillion in new tax increases; annual tax collections would increase by $2.3 trillion in 10 years.  The $3.4 trillion revenue increase is used to both increase spending on the administration’s priorities and reduce overspending from baseline levels by $2.9 trillion. 

Appropriations for 2017 and Beyond

President Obama claims his budget decreases annually provided agency spending for 2017 by $15 billion (or -1.4 percent) relative to 2016 levels. In fact, the president requests appropriations that would provide budgetary resources to agencies that are $24.2 billion above the amounts implied by adherence to the statutory spending limits of $1.070 trillion ($551 billion for defense spending and $519 billion for non-defense spending). 

Interest, Other Mandatory Spending

President Obama’s plan more than triples interest costs, which remain the fastest growing item in the budget. The President estimates that net interest outlays will grow from $240 billion in 2016 to $787 billion in 2026, or a growth of 228 percent over the 10-year period. Under the president’s plan, interest costs would be larger than appropriations for the Department of Defense by 2022.

Rising Debt, Revenue Policy Changes

Federal debt held by the public will increase by $7.173 trillion from the end of 2016 through the end of 2026, or a growth of 51 percent in 10 years. Publicly held debt will start the budget period at 76.5 percent the size of the U.S. economy. If all of the President’s policies are adopted, it will end the budget window at 75.3 percent of GDP in 2026.

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