CBO says Obama tax increases won't be enough

Congressional Budget Office says Obama's tax increases won't cause long-term improvement in the US's budget situation. To control any budget you have to control spending. That's a "Duh!" to you and me but unthinkable in D.C.

Heritage Foundation

While President Obama keeps calling for more taxes, today’s figures from the Congressional Budget Office (CBO) show the tax hike he signed into law just last month will provide no lasting improvement in the federal government’s fiscal outlook. This is because spending continues to grow, driving deficits back toward the $1 trillion range by late in the decade. If the President is actually serious about solving the nation’s fiscal problems, he must move to the other side of his “balanced approach”: cutting spending.

• Yet even all this new revenue fails to solve the government’s fiscal problems. Starting at $845 billion this year, deficits shrink somewhat through 2016, but then start rising again, returning to near the trillion-dollar range by 2023. The pattern proves that higher taxes cannot solve the deficit problem—only spending restraint can.
• Debt held by the public this year will be $12.2 trillion, or 76.3 percent of GDP. This debt will remain at around three-fourths the size of the economy or above throughout the decade. These are the highest levels of publicly held debt in 60 years, but unlike those of World War II, these are structural deficits that will persist and worsen over the longer term. Moreover, the projection is based on optimistic assumptions. If different policy outcomes occur (see below), debt held by the public could reach 87 percent of GDP by 2023. With debt at this level, economic growth would slow dramatically.
• Entitlements, which the President refuses to address, continue to drive the spending problem. These programs—led by Medicare, Medicaid, and Social Security—will cause entitlement spending to rise from 13.2 percent of GDP this year to 14.1 percent by 2023, and reach nearly 62 percent of the entire federal budget. Those who claim to be defending these programs by stubbornly resisting needed reforms are only ensuring they will collapse under their own costs. Obamacare makes matters worse, adding nearly $1 trillion in new spending over the next 10 years just for its insurance subsidies. The health care overhaul also will increase spending for Medicaid and the Children’s Health Insurance Program by hundreds of billions of dollars. In dollar terms, spending on Social Security and the health entitlements will more than double in the next 10 years, from $885 billion this year to $1.85 trillion in 2023.