White House predicits $1.33 trillion budget deficit
Nearly two weeks ago, the Congressional Budget Office (CBO) issued a report on the budget outlook for this year, noting that taxpayers can expect yet another trillion dollar deficit — $1.08 trillion, to be exact, under President Barack Obama. But a new estimate from the White House from the yet to be released budget proposal shows a slightly higher deficit — $1.33 trillion — than the CBO, showing that the Obama Administration has no intention of reducing the red ink flowing out of Washington:
President Obama’s Monday budget request to Congress will forecast a fiscal year 2012 deficit of $1.33 trillion and will include hundreds of billions of dollars in proposed infrastructure spending, The Wall Street Journal reported on Friday.
The projected deficit is higher than 2011’s $1.296 trillion deficit and slightly higher than the Congressional Budget Office’s roughly $1.15 trillion projection released last week. The budget, according to draft documents viewed by Dow Jones Newswires and The Journal, will forecast a $901 billion deficit for fiscal 2013, which would be equivalent to 5.5 percent of gross domestic product. That is up from the White House’s September forecast of a deficit of $833 billion, or 5.1 percent of GDP, the newspaper said.
According to The Journal, the White House’s projected 2012 deficit would be about 8.5 percent of GDP.
If the estimate turns out to be accurate, it would be the second-largest budget deficit in real dollar terms, the fourth-highest as a percentage of GDP. Among the proposals in the budget are nearly $826 billion in “short-term measures for job growth” and transportation spending. The budget proposal also calls for raising taxes on anyone making over $250,000, which has long been a proposal of the White House.
Zero Hedge notes that the budget also shows more ominous news:
[W]hile we already know that the total debt by the end of 2012 will be about $16.4 trillion (and likely more, we just use the next debt target, pardon debt ceiling as a referenece point), this means that by the end of 2013, total US debt will be at least $17.4 trillion. Assuming that US 2011 GDP of $15.1 trillion grows by the consensus forecast 2% in 2012 and 3% in 2013, it means that by the end of next year GDP will be $15.8 trillion, or a debt-to-GDP ratio of 110%. Half way from where we are now, to where Italy was yesterday. And of course, both the real final deficit and Debt to GDP will be far, far worse, but that’s irrelevant.
Remember, those days when he had budget deficits that were 1.5% to 3.5% of GDP? Liberals in Congress would whine endless about it, Barack Obama himself called it “unpatriotic.” Don’t get me wrong, George W. Bush was a big spender, but I long for the days of a deficit 3.5% of GDP.