Obama gets bad numbers from Congressional Budget Office
Jobs and the deficits are going to be big themes of President Obama’s big speech tomorrow — and he got some bad numbers on both topics today from the Congressional Budget Office.
Oval colleague Richard Wolf breaks it down for us:
Here’s more bad news on the budget front for President Obama: A new report by the Congressional Budget Office says the nation’s $1.4 trillion deficit is likely to stay in that range for the next two years.
The 2010 deficit should be about $1.35 trillion, and if Obama keeps President Bush’s tax cuts in place and extends other expiring tax breaks, the 2011 deficit would be about the same, the report says. Over the next decade, the nation would rack up another $12 trillion in deficits, thereby doubling the size of the $12 trillion national debt.
“Daunting” and “bleak” were just some of the adjectives used by CBO Director Douglas Elmendorf on Tuesday to describe the 10-year budget picture. Spending is projected to outpace revenue, and the debt would soon be two-thirds the size of the overall economy. By 2020, interest payments on that debt would be more than $700 billion, about four times the size of the current amount.
The report shows the unemployment rate rising slightly above 10% before declining slowly. Not until 2014 would the rate drop back to 5%.
“In sum, the outlook for the federal budget is bleak,” Elmendorf said. “U.S. fiscal policy is on an unsustainable path to an extent that cannot be solved by minor tinkering.”
But don’t worry, it’s Obama to the rescue.
Obama’s federal spending freeze
The White House has been cranking out initiatives daily in an effort to regain the public’s confidence, and on Tuesday, its target was the enormous federal deficit. Aides to President Obama disclosed that his forthcoming budget will call for a three-year freeze on “non-security discretionary funding.” That’s bureaucratese for capping everything but defense, homeland security, veterans, international affairs and entitlements (for example, Medicare and welfare), with no adjustments for inflation. That would result in $250 billion less being spent over the coming decade than currently projected, said Rob Nabors, deputy director of the Office of Management and Budget. Although it’s merely a gesture, it’s a good one that sends the right signals to Congress and the public.
Skeptics were quick to note how little of the budget actually would be affected — about 17% — and how small the savings seem in comparison to the $6 trillion in total deficits expected over the coming decade. And presidential budgets are just proposals; Congress controls the purse strings. It’s hard to say how well received Obama’s latest offering will be, given how few details have been released. The official line is simply that the administration’s budget for fiscal 2010 (which runs from October 2010 through September 2011) will call for cutting some programs and increasing others.
So, in case you’re still confused, the National Debt is projected to double to over $20 trillion in the next ten years and Obama’s answer is to save $250 billion over the next decade. It’s like trying to put out a five alarm fire with a squirt gun, it’s a joke.
Oh, and remember that useless “stimulus” that we borrowed almost a trillion dollars for, the Democrat porkfest that had to be passed immediately to keep the unemployment rate below 8%? Well, four million jobs lost and a 10% unemployment rate later, guess what?
Officials Say Stimulus Bill to Cost $75B More
Last year’s $787 billion economic stimulus bill is going to be even more expensive — $75 billion more.
The new Congressional Budget Office estimate, released Tuesday, provides more ammunition for Republicans who say the stimulus has been long on spending and short on creating promised jobs. The additional cost also eats into the savings forecast from the budget freeze President Barack Obama is expected to propose Wednesday night during his State of the Union address.
Almost half of the additional cost, $34 billion, is because the food stamp program won’t be able to take advantage of lower-than-expected inflation rates and will instead have benefits set by the stimulus bill.
Higher unemployment insurance costs added $21 billion to the bill, and stimulus-subsidized bonds to pay for infrastructure projects have proven more popular than expected with state and local governments.
The $75 billion increase would erase one-third of the $250 billion in 10-year savings that would come from the partial domestic spending freeze being proposed by Obama. The boost in unemployment payments alone would more than erase the $10 billion to $15 billion in first-year savings from such a freeze.
And don’t forget that we borrowed the “stimulus” money so the debt service over time is going to make it cost more.
Read the whole depressing, frightening, and sobering CBO report:
The Budget and Economic Outlook:
Fiscal Years 2010 to 2020
Bleak Economic Projections as Obama Prepares for State of the Union Address
The CBO’s Economic Outlook Is Bleak
US Congressional Budget Office Chief Sees ‘Bleak’ Outlook
CBO Chief: “The Outlook For The Federal Budget Is Bleak”
Budget Office: The government’s finances on ‘unsustainable path’
CBO: Federal Deficit Projected at $1.35T
The Obama Fisc
A ‘Bleak’ Budget but Slightly Better
Obama Seeks Partial Three-Year Spending Freeze
Broad range of programs targeted by proposed spending freeze
How much would Obama’s spending freeze trim US deficits? Not a lot.
The “spending freeze” in context
Tepid Reception for Obama Spending Freeze
Obama faces backlash on spending freeze
The Obama Spending Freeze is Simply Not Credible
Spending Freeze Won’t Melt Partisan Divide
Stimulus is now $75 billion more expensive
Stimulus Bill to Cost $75 Billion More Than Expected, CBO Says
Congressional Budget Office says stimulus bill to cost $75 billion more
CBO: Stimulus $75 Bln More Expensive Than Estimated
Stimulus price tag soars as jobless rate rises
/no matter what Obama sys tomorrow night, the State of the Union, is not strong
Filed under: Blog Entry | Tagged: Barack Obama, Budget Deficits, CBO, CBO Director, Congress, Congressional Budget Office, Defense, Discretionary Funding, Douglas Elmendorf, Economy, Entitlements, Federal Budget, Federal Spending Freeze, George W. Bush, Homeland Security, Inflation, International Affairs, Jobs, National Debt, Non-Security Discretionary Funding, Richard Wolf, Rob Nabors, Spending Freeze, Tax Cuts, Unemployment, Unemployment Rate, Veterans | Leave a Comment »