Budget proposal won’t tame debt, interest would soon exceed military spending

March 4, 2014: Copies of President Obama's proposed fiscal 2015 budget are set out for distribution by the Senate Budget Committee on Capitol Hill. (AP)

President Obama's latest budget proposal paints a troubling picture of America's fiscal future.

Here's a startling snapshot:

-- By 2024, the total national debt would rise from $17.4 trillion to nearly $25 trillion.

-- By 2020, U.S. taxpayers would be paying more in interest on the debt than they would on the entire Defense budget.

-- By 2017, those interest payments would be bigger than the budget for Medicaid.

Despite Democratic claims that President Obama has tackled the deficit, the numbers give a sense of what fiscal hawks -- who have not given up their fight despite an election-year aversion to dealing with the debt -- are so worried about.

"We can't let election-year malaise be an excuse for inaction on such an important issue," Maya MacGuineas, of the Fix the Debt Campaign, said in a statement.

White House officials appear to be declaring a victory of sorts over the deficit -- which is the annual budget shortfall. A White House statement touted the fact that "the deficit has been cut in half as a share of the economy" under Obama.

It is true that under the budget blueprint, the 2015 deficit would shrink to $564 billion from $649 billion this year. That's a sharp fall from year after year of $1 trillion-plus deficits during Obama's first term.

But even when the deficit shrinks, the national debt -- which basically is the nation's ultra-platinum credit card tab -- will continue to grow. A lot.

And every year the debt grows, the interest on that debt also grows, crowding out needed funding for everything from the military to education to infrastructure to entitlements.

Sen. John Barrasso, R-Wyo., said he's concerned that the fastest-growing part of the budget may actually be the interest.

"We are not going to be able to sustain the safety net that we have in this country with this kind of debt," he told Fox News, warning of a "super-sized" government whose budget "will never balance."

Sen. Jeff Sessions, R-Ala., top Republican on the Senate Budget Committee, said the president's proposal will continue to inflict "an excruciating financial toll."

According to White House budget documents, the proposal shows the interest on the debt rising from $223 billion this year to more than $800 billion a decade from now.

What startles lawmakers is how that rapid rise compares with other parts of the budget.

The proposal shows the Defense budget shrinking from $612 billion today to $583 billion in 2020. That same year, the interest on the debt would soar past $600 billion. Soon, it would begin to crowd out other vital areas of the budget as well.

In arguing that the budget plan represents "fiscal responsibility," Obama administration officials point to a select stat -- the percentage the deficit or debt represents as a share of the economy. The White House budget documents show that percentage, in both cases, dipping over the next decade. Sylvia Mathews Burwell, director of the Office of Management and Budget, referred to this as "stabilizing our debt-to-GDP ratio."

But that assumes the economy will not fall victim to another recession. And even when the percentage drops, the debt total keeps rising.

"Although debt would decline as a share of GDP under the president's budget, it will be far too high and could be even higher if the economy doesn't grow as the president hopes or other assumptions in the budget prove to be too optimistic," MacGuineas said.

Many members of Congress, though, have been just as reluctant as members of the administration to take on tough long-term talks about tackling the debt. Past talks between Obama and Republican leaders like House Speaker John Boehner failed to produce a so-called "grand bargain," leaving both sides feeling burned by the effort. Republicans blame Democrats for pursuing tax increases and shielding some entitlement spending, while Democrats blame Republicans for their stalwart opposition to most tax hikes.

The White House says that it will nevertheless push for some savings in the budget plan, including $402 billion in "health savings" and $650 billion from proposed tax reform over the next decade.

Congress is likely to go its own way on the budget all the same, but the current fiscal trajectory is not much different than the one Obama proposes.