CBO: Obama's New Budget Will Almost Double National Debt; Obama's Budget Director Admits that the Projected Deficits are “ultimately not sustainable”

**TXCharlie** · 03-20-09, 05:00 PM

More "change we can believe in". Someone please slap him the next time he complains about the $4 Trillion total Bush deficit.

http://www.nytimes.com/2009/03/21/wa...eficit.html?hp

Much Bigger Deficits Seen in Budget Office Forecast

Published: March 20, 2009

WASHINGTON — President Obama’s budget proposals, if carried out, would produce a staggering $9.3 trillion in total deficits over the next decade, much more than the White House has predicted, the Congressional Budget Office said on Friday.

Related

Budget Report (PDF)

The office’s estimates of deficits in the fiscal years 2010 through 2019 “exceed those anticipated by the administration by $2.3 trillion.”

The deficits under the Obama plan would be $4.9 trillion more than the projected deficits

if there were no changes in current laws and policies — what the nonpartisan budget office calls its baseline assumption.

The startling new figures have enormous implications, political as well as fiscal. They are certain to bring new expressions of alarm and dismay from deficit hawks on Capitol Hill, where the president’s $3.6 trillion budget proposal for the next fiscal year, which begins in October, has already stirred debate.

President Obama’s budget director, Peter R. Orszag, conceded in a news briefing on Friday that annual deficits of 4 to 5 percent of gross domestic product, as envisioned in the office’s report, are “ultimately not sustainable.”

But Mr. Orszag insisted that administration officials “remain confident” in what he called “the four key principles” of the president’s budget outline: health care reform, improvements in education, energy efficiency, and reducing the annual deficit in half by the end of the president’s first term from the extraordinary levels it has suddenly reached because of the bailout and stimulus spending this year.

Mr. Orszag said he was confident that those goals will all be accomplished in whatever budget resolution emerges after negotiations with Congress. Asked about recent statements by Senator Kent Conrad, the North Dakota Democrat who heads the Budget Committee, that the president’s spending plans might have to be adjusted downward, Mr. Orszag said it was always assumed that there would be negotiations. “It’s not like the process would have them just Xerox and vote on it,” he said.

As for the differences among various budget projections, Mr. Orszag attributed them in part to small percentages — such as divergent assumptions about the rate of economic growth — that, when applied to huge numbers, can produce eye-popping contrasts.

The new estimates will reignite the debate over whether the president’s spending plans are far too ambitious, given the state of the economy, or just what is needed to address systemic problems.

Senator Charles E. Grassley, Republican of Iowa and ranking minority member on the Finance Committee, as well as a senior member on the Budget panel, said Congress and the White House need to get the message that the new figures embody.

“People can afford only so much government spending, even for the worthiest-sounding causes,” he said in a statement.

The deficit is the year-by-year gap between what the government spends and the revenue it takes in. So even if annual deficits are cut, the overall national debt will continue to grow so long as there is no surplus. The debt now stands at around $11 trillion, with about $6.5 trillion owed to individuals, corporations and governments and other lenders, foreign or domestic, while about $4.3 trillion is owed to the funds for Social Security benefits, military and civil service pensions and other government programs.

**Retdetsgt** · 03-20-09, 05:08 PM

Our only hope is that he loses at least one house of Congress next year. Otherwise, we're really screwed.

**TXCharlie** · 03-20-09, 05:34 PM

Yep, we can only hope... Did you read this part in the PDF?

"Proposed changes in tax policy would reduce revenues by an estimated $2.1 trillion (or 6.1 percent) over the next 10 years..."

Correct me if I'm wrong, but doesn't this mean that by increasing taxes he will actually reduce tax revenue? That's what Ronald Reagan and both Bush administrations said.

Welcome to the reality of "trickle-down economics" in reverse, Mr. Obama.

**Morris** · 03-20-09, 05:35 PM

You would have to have the mental capacity of moss not to recognize that printing money out of thin air is wrong and paying for things without the financial backing leads to this. Any family with a budget will tell you that.

Seems some folks in the rarefied air of DC forgot that.