The Reality of Obama's Budget

By FOXBusiness

President Obama calls his new budget one of “tough choices and sacrifices,” but here's the kicker— this president plans to spend more than he takes in, every year of the ten-year budget.

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Here's the reality: He sent Congress a $3.7 trillion budget today. That's nearly 2.5% less than what Obama and the democrats will spend in the current budget year.

But Obama’s budget still calls for a deficit of more than $1 trillion in 2012 - actually adding $8 billion to the projected deficit for that year.

How does that work? Obama is really only going to "freeze" spending, but still "invest"  - a.k.a. spend - in areas he considers priorities like education, clean energy, and of course, high-speed rail.

Of the trillion dollars in deficit savings only about two-thirds would come from spending cuts. So where would the other third come from? Tax increases.

The biggest tax hike would come from a plan to trim deductions the wealthiest can claim on their taxes - charitable donations, mortgage interest, local tax payments, etc.

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Oh yea, and remember the Bush tax cuts that Obama pushed to have extended in December? He's planning on letting them expire at the end of 2012 to help make up for the deficit.

The president's projected $1.7 trillion deficit for this year is actually higher than what many had predicted. And it would be the highest dollar amount ever.

More than $200 billion above the record in 2009, and hidden in the weeds, that's way more than what the CBO had been predicting.

It would also be nearly 11% of the total economy – the highest since WWII.

That sounds bad... but it could and will most likely be worse, because all of these assumptions and predictions throughout this budget proposal are based on the assumption and prediction the economy will rapidly improve.

Take a look at expectations for economic growth. For this year the White House sees GDP growing at 4%, which is about right.

The congressional budget office sees growth of 3.8%, but in succeeding years those numbers diverge. In 2012 the Obama budget forecasts growth at over 5%. The CBO will be less than 4.5%.

Then in 2013 and 2014, the Obama budget clocks growth at an astonishing 6.1%. The CBO… still hovering around 5%.

If you ask me, they might both be too optimistic. Even so they sure ain't the same, leaving a huge reality gap.

The White House numbers suppose a robust economy that will spin off incredible tax revenue, unrealistically so. In fact that's the theme of this entire budget -- unrealistic.

This white house is once again living in la-la land, and refuses to face reality, for fear we may not have high-speed rail.

Be sure to catch the Willis Report on the FOX Business Network every weekday from 5-6pm ET.

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