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CBO: Obama Underestimates Deficit by $2.3 Trillion !!
Fiscal Times ^ | 03/28/2011 | James C. Cooper

Posted on 03/28/2011 12:22:51 PM PDT by SeekAndFind

Obama’s budget credibility took a hit from the nonpartisan Congressional Budget Office this month, when CBO said the administration’s 2012 budget proposal will not deliver the deficit improvement in the coming decade that it promised.

CBO’s analysis said deficits through 2021 would total $2.3 trillion more than those projected in the budget document prepared by the White House Office of Management and Budget (OMB). Instead of falling to 3 percent of GDP by 2017 and remaining near that level through 2021, CBO analysts say the deficit would never go below 4.1 percent of GDP and would begin to rise toward the end of the period, hitting 4.9 percent in 2021.

The analysis will add fuel to the Republican’s fire as the Washington budget battle heads down to the wire — again. In lieu of an official budget, the latest in a series of temporary spending bills that have kept the government operating will expire on Apr. 8. President Obama will have to negotiate a deal with House Republicans who want $61 billion in spending cuts in order to keep the government running until the end of the current fiscal year on Sept. 30. Still, Obama’s bigger challenge will be the hard choices facing the 2012 budget and new pressure to reduce future deficits.

The projected failure to reach 3 percent of GDP is important. At that level the so-called “primary budget,” which excludes interest payments, is in balance. A deficit maintained at that level typically means that debt held by the public is not growing any faster than GDP. The administration’s numbers show public debt stabilizing at about 77 percent of GDP, but CBO projects the White House’s proposals would double the debt by 2021, causing a steady rise to a hefty 87 percent of GDP, up from 62 percent in 2010.

CBO’s projections differ from those of the OMB for two broad reasons. First, there are differences in the underlying forecasts of what would happen without any of the proposals in Obama’s 2012 budget; that is, if current policy was unchanged for the next 10 years. That difference accounts for some $1.3 trillion of the $2.3 trillion disparity, due in large part to the administration’s more upbeat forecast for economic growth. The White House sees growth averaging 3.9 percent per year over the next five years vs. CBO’s 3.3 percent. The other $1 trillion reflects differing estimates of the cost of new programs and savings on existing programs.

Senate Republican Leader Mitch McConnell (R-KY) recently issued a quid pro quo linking GOP support for raising the $14.3 billion statutory ceiling on federal debt to Obama’s agreement to long-term spending cuts that would address the unsustainable path of fiscal policy. The Treasury Dept. says the debt limit will be reached between Apr. 15 and May 31. Economists have warned that market reaction to hitting that ceiling could harm the economy, if holders of U.S. Treasury securities demand higher yields out of uncertainty over the government’s ability to function and meet its obligations.

If McConnell and the GOP are able to bring Obama into a discussion of long-term deficit reduction, the national debate over taxes and entitlement programs will ratchet up several notches. “The policy changes that are needed will significantly affect popular programs or people’s taxes or both,” said CBO Director Douglas Elmendorf at a policy conference in early March. On the revenue side, taxes on individual income and social insurance account for more than 80 percent of all revenues. As for spending, annually funded discretionary programs outside of defense are only 19 percent of all outlays and cannot alone solve the problem, which means mandatory entitlement programs will have to be a part of any solution.


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: budgetdeficit; cbo; debt; default; deficit; democrats; economy; obama; repudiation

1 posted on 03/28/2011 12:22:56 PM PDT by SeekAndFind
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To: SeekAndFind
Now that he's taking a beating from them, I wonder how much longer Obama (and his administration) will ‘tolerate’ the use of the term ‘nonpartisan’ when referring to the CBO before ‘speaking out’ against it.
2 posted on 03/28/2011 12:25:40 PM PDT by WayneS (Remember: One man's Kinetic Military Action is another man's Man-Caused Disaster)
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To: SeekAndFind

A trillion here and a trillion there and it starts to add up to real money.


3 posted on 03/28/2011 12:26:03 PM PDT by fieldmarshaldj (~"This is what happens when you find a stranger in the Amber Lamps !"~~)
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To: SeekAndFind

Obama’s Massage Parlor budget - “Let’s just massage those numbers to look a little better.”


4 posted on 03/28/2011 12:26:24 PM PDT by blueunicorn6 ("A crack shot and a good dancer")
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To: SeekAndFind

Impeach the incompetent boob!


5 posted on 03/28/2011 12:27:27 PM PDT by Jim Robinson (Rebellion is brewing!! Impeach the corrupt Marxist bastard!!)
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To: Jet Jaguar; NorwegianViking; ExTexasRedhead; HollyB; FromLori; EricTheRed_VocalMinority; ...

The list, ping

Let me know if you would like to be on or off the ping list

http://www.nachumlist.com/


6 posted on 03/28/2011 12:28:54 PM PDT by Nachum (The complete Obama list at www.nachumlist.com)
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To: SeekAndFind

Gee, there’s a surprise . . . the Obama administration lying about something! Will wonders never cease?


7 posted on 03/28/2011 12:33:23 PM PDT by jakota (®)
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To: SeekAndFind

He’ll finish his one term lower than Carter, and go down in history are the worst POTUS in history.

Headed there now like a freight train.


8 posted on 03/28/2011 12:37:07 PM PDT by gaijin
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To: SeekAndFind

“close enough for gubmint work”.


9 posted on 03/28/2011 12:37:07 PM PDT by WOBBLY BOB ( "I don't want the majority if we don't stand for something"- Jim Demint)
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To: SeekAndFind

that’s a just a wee bit more deficit than he “inherited” from George Bush, isn’t it


10 posted on 03/28/2011 12:40:16 PM PDT by silverleaf (All that is necessary for evil to succeed, is that good men do nothing)
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To: SeekAndFind

This whole economic/financial thing is the equivalent on that poor little strand of cord holding the fat lady’s bustle during the final Aria. Whether Obama and his scum can keep it from breaking and unfolding the ‘folds of deceit’ exposed by the collapse is the main question. With lies, deceit, collusion, and willing cooperation from the MSM, he is crawling to the finish line of 2012. If he makes it victoriously, the shit will hit the fan soon thereafter and the drastic funds confiscation will start. He has no other financially viable alternative whatsoever - the overseas partners are tired of buy toilet paper T-bills.


11 posted on 03/28/2011 12:41:45 PM PDT by Gaffer
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To: SeekAndFind

12 posted on 03/28/2011 12:42:25 PM PDT by Lucky9teen (Jobs? Nope! Economy? Nope! Disarm the U.S? Yep! Impeach the treasonous Marxist Muslim usurper bast)
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To: SeekAndFind

13 posted on 03/28/2011 12:45:13 PM PDT by sr4402
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To: SeekAndFind

To anyone experienced in real world finance, large variations in numbers reported mean one thing: the numbers are so heavily manipulated with so many assumptions they are meaningless.

Our tax dollars are MOSTLY being stolen by an enormous collection of criminal syndicates.

All three branches of the Federal government have consistently demonstrated a willingness to participate in this crime.

Therefore, having government control it’s own budget has become an obsolete idea.

It will not work.

The House of Representatives has the “purse strings” but does nothing. They are rapidly running out of time to start cutting the size of government. Non-military needs to go to perhaps 10% to 30% of it’s current size at this point. SS and medicare/medicaid needs to be transitioned to the free market.

Congress needs to be isolated from all lobbyists.

Executive branch is out of control.


14 posted on 03/28/2011 12:45:29 PM PDT by PieterCasparzen (Huguenot)
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To: SeekAndFind

15 posted on 03/28/2011 12:46:07 PM PDT by Lucky9teen (Jobs? Nope! Economy? Nope! Disarm the U.S? Yep! Impeach the treasonous Marxist Muslim usurper bast)
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To: SeekAndFind

The Republican Party should cough up enough cash to buy TV time to explain the horrendous financial condition that the Democrats’ vote buying has caused. The news media absolutely refuses to let the message get out otherwise.

Right before the vote to raise the debt ceiling would be a good time to have this fire-and-brimstone chat with the ignorant public. Perhaps the teachable ones would not join the government unions in going ape at the thought of the government shutting down after seeing the disastrous course the nation is taking.


16 posted on 03/28/2011 12:50:44 PM PDT by kittymyrib
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To: SeekAndFind

The way this administration spends money, this is nothing more than a “rounding error”.


17 posted on 03/28/2011 12:50:50 PM PDT by PalmettoMason (It's easy being a menace to society when WAY OVER half the population is happy being sheep.)
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To: SeekAndFind
"On the revenue side, taxes on individual income and social insurance account for more than 80 percent of all revenues."

"Individuals" continue to buy far too much while producing and selling far too little. Feed the beast, deserve what you get.


18 posted on 03/28/2011 12:50:50 PM PDT by familyop ("Dry land is not just our destination, it is our destiny!" --"Deacon," "Waterworld")
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To: rush; kristinn; holdonnow; HonestConservative

Ping


19 posted on 03/28/2011 12:55:08 PM PDT by AliVeritas (Pray. For all the latest, check out: http://directorblue.blogspot.com/)
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To: Lucky9teen

Interesting chart.

Did the source ( what is it anyway?) give a breakdown of the specific promises he made?


20 posted on 03/28/2011 1:19:39 PM PDT by SeekAndFind
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To: Jim Robinson
On the revenue side, taxes on individual income and social insurance account for more than 80 percent of all revenues.

They're counting FICA in the same bucket as income tax revenue. That's fair I guess because that's the way they're spending it. I'd love to see the numbers without FICA figured in the way they have it.

21 posted on 03/28/2011 1:23:42 PM PDT by Lurker (The avalanche has begun. The pebbles no longer have a vote.)
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To: SeekAndFind

http://isiria.wordpress.com/page/37/


22 posted on 03/28/2011 1:45:10 PM PDT by Lucky9teen (Jobs? Nope! Economy? Nope! Disarm the U.S? Yep! Impeach the treasonous Marxist Muslim usurper bast)
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To: SeekAndFind

Also...http://www.kchristieh.com/blog/?p=3248

But they all track back to www.politifact.com (which I can’t get to, I get a proxy error message)


23 posted on 03/28/2011 1:47:07 PM PDT by Lucky9teen (Jobs? Nope! Economy? Nope! Disarm the U.S? Yep! Impeach the treasonous Marxist Muslim usurper bast)
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To: SeekAndFind

I don’t know why anyone would believe any number Obama throws out there anyway. He’s a proven liar - and not just occasionally.


24 posted on 03/28/2011 2:04:37 PM PDT by MEGoody (Ye shall know the truth, and the truth shall make you free.)
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To: SeekAndFind

A trillion here, a trillion there. Nothing to see here, move along.


25 posted on 03/28/2011 2:16:01 PM PDT by greatplains
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; ColdOne; Convert from ECUSA; Delacon; ...

Ever since birth he has hated capitalism, and hence has never been very attentive to economic figures. Thanks SeekAndFind.


26 posted on 03/28/2011 4:05:13 PM PDT by SunkenCiv (Thanks Cincinna for this link -- http://www.friendsofitamar.org)
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To: SeekAndFind; All

27 posted on 03/28/2011 7:56:46 PM PDT by Diana in Wisconsin (I don't have 'Hobbies.' I'm developing a robust post-Apocalyptic skill set...)
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