Skip to comments.CBO: Obama Underestimates Deficit by $2.3 Trillion !!
Posted on 03/28/2011 12:22:51 PM PDT by SeekAndFind
Obamas budget credibility took a hit from the nonpartisan Congressional Budget Office this month, when CBO said the administrations 2012 budget proposal will not deliver the deficit improvement in the coming decade that it promised.
CBOs 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 Republicans 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, Obamas 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 administrations numbers show public debt stabilizing at about 77 percent of GDP, but CBO projects the White Houses proposals would double the debt by 2021, causing a steady rise to a hefty 87 percent of GDP, up from 62 percent in 2010.
CBOs 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 Obamas 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 administrations more upbeat forecast for economic growth. The White House sees growth averaging 3.9 percent per year over the next five years vs. CBOs 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 Obamas 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 governments 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 peoples 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.
A trillion here and a trillion there and it starts to add up to real money.
Obama’s Massage Parlor budget - “Let’s just massage those numbers to look a little better.”
Impeach the incompetent boob!
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Gee, there’s a surprise . . . the Obama administration lying about something! Will wonders never cease?
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.
“close enough for gubmint work”.
that’s a just a wee bit more deficit than he “inherited” from George Bush, isn’t it
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.
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.
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.
The way this administration spends money, this is nothing more than a “rounding error”.
Did the source ( what is it anyway?) give a breakdown of the specific promises he made?
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