CBO estimates $9.5 trillion in deficits over 10 years
The Obama Administration received some bad news on Friday when the Congressional Budget Office released numbers showing deficits over the next 10 years to be $9.5 trillion, more than $2 trillion higher than the White House’s estimate:
The Congressional Budget Office on Friday released its analysis of President Obama’s 2012 budget proposal and found it does less to rein in deficits and the debt than the administration had estimated.
CBO estimates Obama’s plan would produce 10 years of deficits totaling $9.5 trillion. By 2021, it would increase the debt held by the public to 87 percent of gross domestic product.
The administration, using different methods, estimated budget deficits would total $7.2 trillion over the next 10 years under the 2012 budget. It forecast that total debt in 2021 would be 77 percent of GDP.
The White House also said total deficits over the next decade would be $1.1 trillion more without the recommendations included in Obama’s budget.
Marc Goldwein, policy director for the Committee for a Responsible Federal Budget, said that CBO has found the effects to be almost nil.
He explained that the difference between the CBO’s $9.5 trillion estimate and OMB’s $7.2 trillion estimate comes from two sources: rosy economic growth assumptions by OMB and offsets for the Medicare doc fix as well as transportation spending OMB did not specify in the budget and which CBO will not factor in.
The most important aspect of CBO’s analysis is that, while OMB claimed the president’s budget “stabilized” the debt at 77 percent of GDP over the 10-year window, CBO estimates the debt will grow throughout the period and end up at 87 percent, he said.
No matter how you look at it, the budget in unsustainable - not just in the next 10 years, but in the long-term as well. It’s a sad reality that more members of Congress are realizing, but the question is how they’ll handle it.
Sixty-four Senators - half Democrats, half Republicans - sent a letter to President Barack Obama urging him to get serious on tax and entitlement reform:
The letter was circulated by Sens. Mike Johanns (R-Neb.) and Michael Bennet (D-Colo.), who were able to get a supermajority of the Senate within 24 hours. It urges Obama to “engage in a broader discussion about a comprehensive deficit-reduction package.”
“Specifically, we hope that the discussion will include discretionary spending cuts, entitlement changes and tax reform,” the letter states.
It endorses the report late last year from Obama’s fiscal commission as a basis for the conversation.
Meanwhile, Sen. Rand Paul (R-KY) has presented a budget plan that would cut spending by $4 trillion, eliminate four departments and balances the budget in five years:
There is no limitation on proposals to consider, but unless Obama decides to end a presidential campaign that has been going since 2004 and show some leadership, I’m afraid that we will miss the chance where there seems to be some consensus forming, albeit slowly.