President Obama just released an outline of his first budget—the fiscal year 2010 budget—in a document titled A New Era of Responsibility: Renewing America’s Promise. A summary version of a more detailed proposal that Obama will release in April, this 134-page summary budget also reveals the amount of spending and level of deficit for fiscal year 2009 because, at the time of the document’s release, Congress had to yet complete 9 of the 12 appropriations bills for the current fiscal year. Moreover, President Bush and Congress added a significant amount of spending to FY2009 through the various bailouts at the end of 2008, which were not accounted for in the FY2009 request figure. President Obama added spending too through the stimulus bill that he signed in February of this year—25 percent of that $789 billion bill will be spent in FY2009.
Now the Democrats are in control of both sides of Pennsylvania Avenue. While President Obama promises an era of new responsibility, his first budget indicates a return to the dramatic fiscal policy of the 1970s. Based on his budget, the onlyp romises the president can credibly make are high marginal rates, higher tax burdens for all, dramatic spending increases, and unprecedented and sustained levels of debt for the American people, their children, and grandchildren. Unfortunately, we know the consequences of such policies: slower growth rates, higher unemployment rates, lower standards of living, and higher levels of poverty.