Where Ryan's Crazy Graph Came From

I poked fun at Paul Ryan's 100-year federal spending graph in an earlier post, but I wanted to do a follow-up on exactly where this nutty figure comes from. The same graph appears in the full alternative budget, so it's worth figuring out. Here's the alternate version of the same graph:


GOP budget thing.jpg
Again, the red line riding off into budgetary infinity is described as "Obama FY2010 Budget," and the projection is sourced to the CBO. The point I made in the last post is that the CBO has never done a projection of the Obama budget through 2080, so that sourcing can't be right.

But I assume what the GOP is relying on is a CBO letter to Ryan called "The Long-Term Economic Effects of Some Alternative Budget Policies," which contained budget estimates based on the CBO's December 2007 Long-Term Budget Outlook.

But there are three problems with using this as a source. The first is that the CBO's 70 year projections are, as one CBO official told me a moment ago, "advisory is nature": "We have a lot of uncertainty in our ten-year projections, so there's obviously much more in our 70-year projections."

Second, both the 2007 Budget outlook and the 2008 letter to Ryan are based on the Bush budget, not the Obama budget. (For the ineluctable, historical reason that they were written in 2007 and 2008.)

Third, both budget documents were written by Obama's budget direcetor, Peter Orszag, when he was head of the CBO. (I'm going to guess he knows about the long-term budget risks that he identified last year.)

Finally (and this is mostly an excuse to include another pretty graph), the growth in spending is almost entirely the result of an increase in long-term Medicare and Medicaid liabilities that have nothing to do with the Obama budget. Orszag has made this his personal campaign for the last few years, so I'm guessing he knows about this, too:


spending GDP.jpg