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.
Few members of the House have been more consistant in trying to keep the Obama Administration accountable for its economic policies than Rep. Tom McClintock (R-CA). Recently, Rep. McClintock had the opportunity to question Doug Elmendorf, director of the Congressional Budget Office (CBO), about how President Obama’s economic policies are hurting the nation during a House Budget Committee hearing on the recent economic report released by his agency.
Many observers feel that Barack Obama has a very good shot at re-election this fall as Mitt Romney — who often performs the best out of the GOP field in head-to-head matchups against the president — has given Democrats plent of firepower in recent days. But even with today’s good jobs report, the economy should be a concern for Obama’s campaign, reports Ian Swanson at The Hill:
Recent economic reports could have the Obama White House worried.
All of the reports suggest the pace of economic growth is still slow, and that unemployment could rise, and not fall, by the end of the year.
2012 has been a good year for markets so far, despite unease over Europe. Every major index reported strong gains in January, and the rally on Wednesday continued a good year. Improving 401(k) plans might put voters in more of a mood to give Obama four more years in November.
Still, there are plenty of reasons to think the markets and jobless rate will go in a different direction later this year.
Here’s why the White House should be nervous:
• The Federal Reserve has announced it will keep interest rates low through 2014, a sign of its pessimism about the pace of the economic recovery.
• The Commerce Department found the nation’s economy grew at a 2.8 percent rate in the fourth quarter of 2011, a faster pace than the rest of the year but worse than expected. If the economic growth slows in the next quarter, it will be tough to keep unemployment down.
In this new video from Reason, Veronique de Rugy, an economist at the Mercatus Center at George Mason University who has extensively studied the 2009 stimulus, explains why the the deficit spending failed to revive the economy. Reason and De Rugy use the city of Silver Springs, Maryland, who receive subsidies for transportation projects, as a case study, as well as analyzing other aspects of the stimulus spending:
Even though the Obama Administration, congressional Democrats, and Keynesian economists claimed that spending would get the country moving again, critics of the 2009 stimulus bill argued that the it was wasteful and would result in a negative impact on the economy when it was all said and done. Who was right? Well, a new report from the Congressional Budget Office shows that many of the criticisms of Obamanomics were well-founded:
The Congressional Budget Office on Tuesday downgraded its estimate of the benefits of President Obama’s 2009 stimulus package, saying it may have sustained as few as 700,000 jobs at its peak last year and that over the long run it will actually be a net drag on the economy.
CBO said that while the Recovery Act boosted the economy in the short run, the extra debt that the stimulus piled up “crowds out” private investment and “will reduce output slightly in the long run — by between 0 and 0.2 percent after 2016.”
The analysis confirms what CBO predicted before the stimulus passed in February 2009, though the top-end decline of two-tenths of a percent is actually deeper than the agency predicted back then.
CBO has re-evaluated the stimulus every three months, and its estimates for the total cost have varied. Initially the package was pegged at $787 billion, rose as high as $862 billion at one point, and is now projected to be $825 billion once all the money is paid out.
The nonpartisan agency also has changed its model for the spending’s impact on the economy, and the new calculations show the Recovery Act did less than originally projected.
Austan Goolsbee, who until recently served as Obama’s chief economic advisor, says that he wouldn’t have backed the failed “Cash for Clunkers” program if he had to do it all over again:
Former Obama administration economic adviser Austan Goolsbee said Thursday that if given a second chance he would not have backed the Cash for Clunkers program or the home buyer tax credit passed in 2009 to stave off further economic distress.
“Because we didn’t know if [economic recovery was] going to be short or long,” the Obama administration tried measures to address both scenarios, Goolsbee explained on MSNBC’s “Morning Joe.”
“If you look at Cash for Clunkers or the first home buyer tax credit, they were geared to trying to shift [recovery] from 2010 into 2009. Given it’s taken this long [to recover], I don’t think you would do that short-run stuff,” Goolsbee added.
Goolsbee, the former chairman of President Barack Obama’s Council of Economic Advisers, said the administration misjudged how quickly the country could recover from the economic damage of the 2008 economic collapse.
“It has proved a longer, tougher ride than we thought at the time,” Goolsbee said. “At the time we come in, it’s an awful, awful moment. We were losing 800,000 jobs a month and the economy is in a tough spot. There was a debate, and it continues now, of ‘Can we come back quickly from this?’”
While many apologists of President Barack Obama still defend Cash for Clunkers program, it’s clear that it was a failure and has had adversed effects; including driving up the cost of used cars on the market.
John Boehner wanted President Obama’s jobs bill in bite-sized chunks, versus being super-sized. Obama wanted to ram the whole thing through in one big gulp. Well, with the Senate effectively killing it, President Obama now vows to do just what Boehner wanted in the first place.
Shortly after his $447 billion jobs plan stalled Tuesday in the Senate, President Barack Obama vowed to break the broad initiative down into numerous, separate bills — potentially setting up even more showdowns between Democrats and Republicans on how to boost the economy and where to get the money to do so.
The Democrat-pushed bill failed Tuesday night to get the 60 votes needed in the Senate to proceed. A total of 50 members of the chamber supported the measure, while 49 cast ballots against it.
In a statement issued Tuesday night, Obama said that despite being an obvious defeat, “tonight’s vote is by no means the end of this fight.” He then outlined his intention to work with Senate Majority Harry Reid and produce several smaller bills derived from the bigger plan.
“In the coming days, members of Congress will have to take a stand on whether they believe we should put teachers, construction workers, police officers and firefighters back on the job,” Obama said in a statement released Tuesday night. “They’ll get a vote on whether they believe we should protect tax breaks for small business owners and middle-class Americans, or whether we should protect tax breaks for millionaires and billionaires.”
As has been reported, President Obama’s jobs bill – you know, the one he’s been trying to rally support behind for the last month – took a significant hit in the Senate on Tuesday when that chamber voted 50-49 to block the bill. That wasn’t even close to the 60 votes needed to override a filibuster and seems a clear sign that the bill is fated to die a horribly, fiery death.
The Hill is reporting that several centrist Democrats who were among those 49 votes have said they would have voted against the bill itself. It seems safe to say that the 50 who voted to block debate on the bill are likely to also vote against it later.
The interesting part is how many Democrats who seem to side with the bill itself have concerns about whether the bill is really the right bill with our nation’s deficit being what it is. Democrats. Worried about the deficit. Remember that for a long, long time.
Jobs are vitally important. There really isn’t any such thing as a “jobless” recovery. Without jobs, people will suffer for a while and the nation as a whole will suffer as a result. However, jobs creation is something that the government simply can’t do and in reality, the President’s plan isn’t exactly designed to do. Unfortunately, there are some problems with it. For example, take the outline of the bill from americanjobsact.com. I’m going to address these points one by one.
An altered version of President Barack Obama’s latest stimulus gimmick, what he calls a “jobs plan,” failed to gain the 60 votes required in the Senate to bring it to final passage yesterday evening and is essentially dead — at least as one package:
President Obama received a slap from members of his own party Tuesday as the Senate voted 51-48 to block his $447 billion jobs package.
The jobs plan, which the president has spent much of the last month touting on a cross-country tour, fell well short of the 60 votes it needed to proceed.
The only Democrats to vote against the measure were Sens. Ben Nelson (Neb.) and Jon Tester (Mont.), but a number of other centrists in the party indicated they would vote against the package even though they supported launching a debate on the measure.
All of the Republicans present on Tuesday voted against the motion.
Senate Majority Leader Harry Reid switched his vote so he can, under Senate rules, bring the bill up for a vote some time in the future. But again, the bill as a single package is dead. Both House and Senate Republicans have been open to certain portions of the proposal and the White House has signaled that they’re open to passing it in pieces.
We’ll no doubt hear President Obama and his party claim that Republicans are blocking these historically bipartisan proposals, but that’s disingenuous, notes the AP:
He is waging a campaign, one in which nuance and context and competing responses don’t always fit in if they don’t help make the case.
In an interview with George Stephanopoulos, host of Good Morning America, President Barack Obama admits that Americans are worse off now than when he took office — que the ads, boys — and says he is the underdog in 2012:
resident Obama on Monday took the extraordinary step of declaring himself the underdog in the 2012 race for the White House.
He acknowledged that voters are not better off than they were four years ago, and face a mortgage crisis, unemployment above 9 percent and a bumpy stock market.
“Well, I don’t think they’re better off than they were four years ago. They’re not better off than they were before Lehman’s collapse, before the financial crisis, before this extraordinary recession that we’re going through,” Obama said in a television interview.
“Nobody’s going to deny we’re not where we need to be,” said Obama, who after a tough primary fight sailed to election in 2008 on the promise of hope and change, winning states no Democrat had won in a generation.
“I don’t mind,” Obama said. “I’m used to being the underdog.”
By casting himself in that role, Obama is managing expectations for his reelection bid with both the media and his political base, which has been unhappy with White House concessions to Republicans.
Um, Barack Obama was not the underdog when he ran for the United States Senate in 2004 and, while the race against John McCain in 2008 was contentious, he had momentum nearly the entire campaign. Don’t play that card here. Yeah, his poll numbers are poor and most Americans — either pluralities or slight majorities — believe that he shouldn’t be re-elected; but he is still leading most of his potential Republican opponents.