Budget Deficit Projections Raised To $9 Trillion Over Next Decade
By Justin Gardner | Related entries in Barack, Economy, Money, Obama
Per Politico, the White House claims that “more than half of the projected deficits over the next 10 years are directly attributable to the previous Administration’s failure to follow the pay-as-you-go principle.”
But even if that’s true, which is likely given the Medicare drug benefit, the Iraq and Afghanistan wars and the expansion of the Pentagon’s budget since 9/11, how likely is it that voters will believe that come 2012? Especially when he passed a $787 billion stimulus plan?
WASHINGTON — The Obama administration, citing an economic downturn that has been deeper than it had first thought, raised its estimate on Tuesday of the government’s deficit over the next decade to $9 trillion from $7.1 trillion.The Office of Management and Budget also said that it expected the economy to contract 2.8 percent this year, substantially more than previously estimated, and that employment would peak at around 10 percent.
But the CBO has substantially different numbers…but there’s a reason for that…
Analysts at the Congressional Budget Office put their 10-year deficit estimate slightly lower, at $7.14 trillion, though the agency uses a slightly different method to reach its number. The budget office takes into account only policies already in place, while the administration can consider policies and budget decisions that it hopes to install.
And some less bad news on our budget deficits…
White House officials predicted that the budget deficit this year would peak at $1.58 trillion, though they said the 2009 shortfall would be about $261 billion lower than they had predicted in May. The main reason is that officials have decided that they will not need another round of bailout money for the nation’s banks. The Congressional Budget Official also estimated a deficit this year of about $1.6 trillion.
So we didn’t spend a quarter of a trillion we thought we might have to because the banks have pulled out of their rut, but still…wow. Again, I think this would be a lot easier to blame on the Bushies had Obama not requested the stimulus and wasn’t trying to reform health care.
Which opens up the question: will the debt and our budget deficits be THE key story in 2012?
More as it develops…
This entry was posted on Tuesday, August 25th, 2009 and is filed under Barack, Economy, Money, Obama. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
August 25th, 2009 at 4:16 pm
Especially when both the Stimulus and the 9,000 earmark budget, were both rammed through by Obama before the administration chose to adopt pay-as-you-go.
This has to be the weirdest defense ever, blame the Bush administration for committing a venal sin (big spending blown budgets), while this administration commits a mortal sin (bigger spending, worse budgets).
Who actually believes this stuff?
August 25th, 2009 at 4:37 pm
The Republicans will try to make both the deficit and debt huge issues, and I think the deficit has a better chance of being really important. If the economy is rolling, people probably won’t care. To most people a $10 trillion debt is pretty much the same as a $7 trillion debt, they’re really big and probably won’t ever be paid off.
Obama will follow Cheney and Reagan’s mantra about deficits not mattering, and as long as he can keep a straight face when he says there will be no tax increases outside of rich people and no spending cuts of any significance, he might get away with it.
August 26th, 2009 at 12:34 am
I think an implosion of our debt is the likely endgame to our general economic malaise. Fasten your seatbelts.
Oh, and I think this number kills healthcare reform. Hopefully it can finally kill the wars.
August 26th, 2009 at 2:59 am
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August 26th, 2009 at 7:14 am
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August 26th, 2009 at 10:46 am
This may well be very true. Even if it is, it’s still a cop out. The Bush admin spent like drunken sailors. They made the choices, along with congress. So let’s all join together and spit on those graves. Fine.
Now, lets move on to noticing that every new budget is a brand new opportunity for Congress and the president to behave in a responsible way by spending within the available means.
So far, all we have is a big blamestorm, and that’s pathetic. If the folks in charge now were truly concerned, and really appreciated the seriousness of the current state of fiscal affairs, they’d be talking about making a very big list of desirable things that the gov’t just can’t afford, and how to cut them from the budget.
If ever there were a spot to apply “watch what they do, not what they say,” gov’t spending is surely it. They SAY they’re worried about overspending, but what are they DOING? WE all know the answer.
Visitors here sit through Justin’s regularly scheduled apologia for overspending which Justin has claimed was essential. Here’s the thing: most of us avoid making hard choices. Overspending is a way to delay hard choices, but it isn’t sustainable. It delays the inevitable reckoning, but makes the reckoning worse. Within 2 years. we will face hard choices which will no longer be optional in any meaningful sense. The rest of the world will not keep financing our debt if we keep spending 4 or 5 for every 3 we have. They just won’t.