Obama Budget Projects Never Ending Rise In National Debt

(CBS)

Despite the budget cuts and tax increases in the Administration's new budget plan, federal spending and indebtedness will continue to rise as far as the eye can see.

The federal deficit this year spikes to $1.75-trillion dollars – by far the largest in U.S. history. In fact, the deficit this year is larger than the entire federal budget just ten years ago when all government outlays amounted to $1.70-trillion.

The new budget reflects President Obama's commitment to cut the annual federal deficit in half by the end of his term in office. Starting next year, the yearly deficit is projected to decrease from $1.1-trillion to $533-billion in the year 2013.

But – if you check the very last chart in the budget book, it shows the National Debt continuing to soar year after year after year.

(AP Photo/Charles Dharapak)

As of today, it's $10.8-trillion. The administration projects it'll climb to $14-trillion next year and in 2013 wind up at $17.1-trillion dollars – very close to matching the size of the entire economy as measured by the projected Gross Domestic Product. And taxpayers will be paying hundreds of billions in interest on the debt each year.

The budget, which carries the title "A New Era of Responsibility," shows that at the end of ten years, the National Debt will hit $23.1-trillion dollars – exactly matching the GDP that year.

In his budget message, Mr. Obama explains that "our problems are rooted in past mistakes."

"We arrived at this point as a result of an era of profound irresponsibility," taking an unmistakable swipe at the budget policies of his immediate predecessor. And in his remarks to his Summit on Financial Responsibility on Monday, he went still further.

"For too long, our budget process in Washington has been an exercise in deception -- a series of accounting tricks to hide the extent of our spending and the shortfalls in our revenue and hope that the American people won't notice: budgeting certain expenditures for just one year, when we know we'll incur them every year for five or 10; budgeting zero dollars for the Iraq war -- zero -- for future years, even when we knew the war would continue; budgeting no money for natural disasters, as if we would ever go 12 months without a single flood, fire, hurricane or earthquake."

That attack was too much for one time White House spokesman Tony Fratto to bear in silence. He served President Bush as deputy press secretary and as a spokesman in the Budget Office and Treasury Department.

He calls the Obama Administration's budget "the height of audacity."

Speaking for himself, Fratto charges the current White House is trying to "mask huge spending increases under the cloak of 'fiscal responsibility.'" And he rejects the current president's charge that the previous Administration's budgets were full of hidden numbers and omissions.

"Our budgets were honest, open, and transparent. Every dime spent was presented, debated, voted on, and counted," said Fratto in a statement e-mailed to CBS News.

And he defended the Bush White House practice of putting war spending in "supplemental" appropriations bills.

"(It) was done to avoid permanently baking those appropriations into the Defense Department's baseline budget. That's good budgeting, not a 'gimmick.'".

Until now, Mr. Bush ran up the biggest deficits and the largest amount of National Debt in U.S. history. The National Debt increased $4.9-trillion on his watch. The new budget plan shows the title of biggest spender will fall to Mr. Obama.
If his numbers prove true, the debt will have soared $6.3-trillion during his term. Double it if he wins a second term.

More CBSNews.com Coverage Of The Budget:

Obama Budget Lays Out "Hard Choices"

Obama's Budget In A Nutshell

Video: Marc Ambinder On The Budget

Obama's Budget Request Takes Aim At Republicans

Obama: "We Have To Focus On Foundations"

Unemployment Targeted At 8%

Obama Seeks $634 Billion For Health Care

Read The Full Budget (PDF)>

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(CBS)

Mark Knoller is a CBS News White House correspondent. You can read more of his posts in Hotsheet here.

[Ludetim]

The things I'm most confused about when it comes to our national debt are.... First what are our repayment terms with countries like China?
Second, over the years many countries have borrowed money from the US and not paid it back. What if we are unable to repay and basically default on all or any part of this debt?? What does China or anybody else hold as collateral? Someone please tell Me!

[One-of-Many]

In my opinion there are two things that need to be discussed here. The first thing is to find out what we got from the Bush administration?s budget, which incurred historical debt levels, and then what we will we get from Obama?s. (this might be a little difficult because Bush has the problem of all that historical data and Obama has the luxury/curse of being at the beginning of his term). The second item is; should we have a deficit at all? Do we want to run the US economy on credit that could bankrupt our children and our children?s children? (this is a huge topic and worth spending some time on so let?s table it for now.) Getting back to the first item then? Whoops, we have one more problem to tackle first. Bush 43 came into office with a budget surplus. Unlike Obama, who is coming into office with the largest deficit in US history, and the worse economy since the Great Depression, Bush had an expanding economy and a budget surplus. So, right out of the gate I call foul. I mean, this article is comparing these two Presidents to each other as the largest deficit makers in US history and the first thing that must be recognized is that one President started with a budget surplus as well as an expanding economy and the other starts with the largest deficit in history and a contracting economy. OK, now that we have decided to pit these two runners in a race against each other and we all agree that we will give one runner a head-start (surplus) and the other runner a rather large disadvantage (record deficit) let?s let them go to it. Wait, I almost forgot, we have to tie the legs together of the runner with that big disadvantage (contracting economy) and let?s give the runner with a head-start a bicycle to use (expanding economy). OK, now we are ready to have a meaningful discussion on deficits?

[dune50]

Your problem here is you are confusing deficit with debt. Deficit relates to the amount of overspending in the budget and as it stands now the national debt is the amount accumulated as a result of deficit spending over the years. Clinton's book keeping showed no deficit spending in his last few budgets. This was because Social Security revenues during those years showed a surplus. By law, the Social Security trust is required to buy Treasury securities with any surplus they have and these purchases add to the national debt. You say Bush II started out with a surplus and I think you you believe that to mean that the Bush administration had "money in the bank". If that is true and if you read the article closely that would mean that BushII had a national debt of 4.9 trillion dollars and at this writing the Obama administration has increased that to in excess of 14.2 trillion. But it is not true, while Clinton sowed a budget surplus the national debt actually went up and was around 6.1 trillion after his last budget (ending in 2001). For some reason many democrats can't seem to buy into that but it is all a matter of public record and you can and I would suggest you should check it out for yourself.

[jkMaryland]

I hope, with more clarity, many more citizens, especially the elderly, may be united in opposition to BHO's plans in general, and in particular to his desire to turn our great medical system into the disaster called British health care. There, newer more costly drugs are not provided and doctors are more inclined to prescribe "getting your affairs in order" than the latest, more effective treatment. It is not at all clear that our citizens yet understand the difference between medical care in our two countries and I think knowledge will turn that tide.

On 2/26/09, Dylan Radigan (sp?) interviewed Peter Orzak, Director of the OMB on CNBC's "Fast Money." Orzak's explained that Obama intends to save money in by denying expensive therapies -that meaning was abundantly clear.

He said they would save a lot by only authorizing treatments "that work," also citing great possible savings in the last 6 months of life. So a Washington bureaucrat looking at your computerized medical record on his terminal will decide if you get a therapy or life saving treatment and irrespective of your needs or your doctor's recommendation. It is also clear they will be making value judgements regarding your age and life expectancy vs. the cost of the treatment.

Part of his budget calls for computerization of medical records and his first steps toward socialized medicine. Our medical care could be reduced to the lowest common denominator and, once that is done, changing back will be difficult. If this budget passes as written, that will be the call to elect a congress that represents America.

[harleyjohn111]

I think the Dems and the Gop use the same speech writers, one talks about Butter the other talks about Guns.And no one cares about my 9 year old son the burden that both parties have on his small back.Well please let me thank Mr Bush and Mr Obama Great Job and I am sure my son will understand this all in 10 or 12 years. Well lets hope so Gentleman.

[texasbeta]

Then one can't criticize the chosen one. Just look at the treatment of Santelli and what happened to "joe the plumber".
Posted by janem4

Santelli is on record saying the economy was strong in Sept of 2008! The exact words he used about borrowers could be applied to his pals, and himself, in the wall street market. I believe THEY got the bailout. As far as Joe - he was NEVER a licensed plumber, never had a license, and owed back taxes...it was proven yesterday that Obama's plan would have actually HELPED him get a small business, but he is nothing more than a sack of trash...he isn't starting any business. He is going to make money off spewing lies...like Limbaugh

[texasbeta]

No, I'm afraid there really are a lot of creepy liberals out there who really are different individuals.

They all sound alike because they toe the party line. And they'll gang up and help each other get non-creepy posters banished.

There are a lot who post under multiple screen names. But there are also a lot of them.
Posted by rat_cheer

You absolute sack of crap. Not once was anything ever referred to about sex with children, NOR is this name used by anyone other than myself. Does it make you feel better to blame the fact that I destroyed your points on someone using multiple screen names? You are ridiculous. Your party is ridiculous. ALSO, for someone who compulsively uses multiple screen names ROWDY, you have no room accuse anyone else.

[mrs_nesbitt]

Gone are the days of the Bush surpluses! Oh woe is us!

[impeachbhb]

WE WILL NOT HAVE A MOUNTING DEFICIT

Once Obama institutes a socialist regime, all of the income will be controlled by a central government. We will be given that which Obama and the central government will control the wealth and allot to us that which they think we need to subsist.

With the government in control of everything, they can control the money supply and pay off the debt.

This worked in Russia until the evil Reagan attacked the socialist system and made the central government devote its resources to defense.

Obama will run his Marxist regime in a much more efficent way.

It will be wonderful!!! We will have a progressive government to take care of our every need. That is why we changed the term from liberal to progressive. We will progress from capitalism to socialism

[wrmscvsuv]

One interesting aspect about the Crash of 1929 is that it was not a necessary and sufficient cause of the Great Depression. Had Hoover applied proper stimulus in 1929 instead of waiting for the ship of economic state to right itself, the recessionary taking-on of water might not have occurred.

Ths Stock Market Crash was definitely not the cause of the Great Depression...it was simply the tip of the iceberg showing, and a symptom of the real malady present. America had borrowed and played the stock market on margin til the ship of state almost capsized. What you have never grasped is, that Keysian economics will definitely not work over the long haul.

The New Deal did nothing more than alleviate the suffering of the unemployed masses with perhaps a few beneficial spending and work projects here and there. The great "stimulus" of the period was WWII and not the giveaway New Deal. I don't believe Roosevelt planned it, but I also do not believe he did enough to prevent it, either. You want to blame Hoover for negligence? Roosevelt had plenty of time to stop Hitler and the war lords in their tracks, but did not choose to do so. Quick and decisive action could have very well prevented WWII. Hindsight is always 20/20.

Hoover did more than most historians give him credit for, however. His policies of the Reconstruction Finance Corporation were copied and expanded by FDR's administration, but Hoover definitely knew what he was doing and also was conscious of the magnitude of the problem of artificially shoring up the economy with its ramifications. Did the economic ship of state ever really right itself, or was it just patched and given a good shove? That's a very interesting question. In my opinion, it was never really fixed. It causes me to wonder if democracy/federal republicanism as we know it will even really work. ???

[wrmscvsuv]

What is despsrately needed now is demand stimulus, not white-knucked, supply-sider budget trimming. Fine-tuning tax policy will come later, after recovery. Until then, as Laffer might have said, if there is no economy, there are no tax breaks to be given.
Posted by alphaa10000 at 1:32 AM : Feb 27, 2009


Alpha, I admire your articulate, scholarly, and adroit presentation here, but what you're essentialy saying is that our automobile is bumping down the road, in serious trouble. We shouldn't worry about trying to fix it, just keep on borrowing money to put gas in the tank and grease on the wheels, and maybe someday it will repair itself.

Too much expectation. The old clunker will not fix itself but will instead get in worse and worse condition. No, we may need some stimulus, that is true, but we also need to concentrate our efforts on fixing the clunker before it completely breaks down, and I don't see Obama's economic plan as doing that.