Uncertain financing for parts of the budget will ultimately add to the deficit.
In the budget, Obama provides financing for the so-called “doc” fix, a part of the red ink in Medicare finances.
For years, the government has assumed in every budget that it will reduce Medicaid payments to doctors by 1 percent to 2 percent – but it never does. By last year, there was a 21 percent gap between what Congress assumed it would pay and what it did pay, says Pete Davis of Davis Capital Investment Ideas, in Washington.
In the budget, Obama funds that gap – for two years. By 2014, it reappears as a $24 billion hole in the budget. By the following year, it's up to $32 billion.
“I think they are just assuming that the way to pay for it will emerge,” says Mr. Davis.
That's also true for two other major programs: the annual effort to keep middle class individuals from having to pay the Alternative Minimum Tax (AMT) and the Highway Trust Fund.
The budget funds the AMT patch for three years, but only two years for the highway spending, says Davis.
