Report: U.S. $1.2 Trillion In The Hole

Congressional Estimators Project Unparalleled Budget Deficit For 2009; Obama Balancing Debt and Stimulus

(CBS/AP)  The U.S. federal budget deficit will hit an unparalleled $1.2 trillion for the 2009 budget year, according to a Capitol Hill aide briefed on new Congressional Budget Office figures.

The aide says the CBO also sees a $703 billion deficit for 2010.

The dismal figures come a day after President-elect Barack Obama warned of "trillion-dollar deficits for years to come."

CBO's figures don't account for the huge economic stimulus bill that Mr. Obama is expected to propose soon to try to jolt the economy. At the same time, they do not reflect the immediate cost of the Wall St. bailout.

The shrinking economy has led to a sharp drop in tax revenues, which is largely responsible for the deficit, along with about $350 billion in spending so far for the Wall St. bailout.

Mr. Obama announced Wednesday the appointment of Nancy Killefer as White House chief performance officer, a new post created to increase government efficiency - one of Mr. Obama's campaign pledges.

Obama said that concerns about rising deficits prompted him to turn down advice from some economists who called for spending $1 trillion or more to jump-start the economy. Obama's proposal is expected to cost nearly $800 billion over two years.

"We have an economic situation that is dire, and we're going to have to jump start this economy with my economic recovery plan, creating 3 million jobs," he said. "That's going to cost some money. And in the short term, we will actually see, potentially, additions to the deficit."

There are also signs that the stimulus bill could become a magnet for good old fashioned pork-barrel spending, reports CBS News correspondent Chip Reid. Mr. Obama has banned congressional pet projects, so the lobbying has shifted to the states and cities.

A wish list from the U.S. Conference of Mayors includes three aquatic centers in Miami for $30 million, a polar bear exhibit in Rhode Island for nearly $5 million, and a museum on the mafia in Las Vegas for $55 million, Reid reports, which are the kinds of projects that could jeopardize Republican support.

Mr. Obama also said that by February he expects to have a plan on how to deal with big ticket spending such as Social Security and Medicare, waste in government and other factors, as well as some "specific outlines" on how to control the deficit.

"We're going to be inheriting a $1 trillion-plus deficit. And if we do nothing, then we will continue to see red ink as far as the eye can see," Obama said after introducing Killefer, who will become the White House's point-person to work with federal agencies to set performance standards and hold agency managers accountable for progress.

Obama called Killefer, who will work out of the White House Office of Management and Budget, "an expert in streamlining policies and wringing out inefficiences."

Mr. Obama and Congress are also promising quick enactment of the economic recovery plan, which will blend up to $300 billion in tax cuts with big new spending programs and could cost up to $775 billion over the next few years.

The flood of red ink probably won't affect that measure but could crimp other items on Mr. Obama's agenda.

The $1.19 trillion 2009 figure shatters the previous record of $455 billion, set only last year. It also represents about 8 percent of the size of the economy, which is higher than the deficits of the 1980s. The 2009 budget year began last Oct. 1.

CBO predicts the deficit will come under control within a few years, but such predictions depend on the expiration of President George W. Bush's tax cuts at the end of next year and repayments from financial institutions that received bailout funds.

While expected, the deficit numbers will give lawmakers second thoughts about creating new spending programs without finding ways to pay for them. And it is likely to prompt a debate about whether tax increases are necessary after the economy recovers from the current recession.

On Tuesday, Mr. Obama issued his most serious remarks yet about the danger of big budget deficits and promised his administration will take steps to bring the tide of red ink under control.

"I'm going to be willing to make some very difficult choices in how we get a handle on this deficit," Obama said Tuesday.

Economists warn that large and sustained budget deficits put upward pressure on interest rates. In the short term, however, efforts to restrain the deficit could have a contracting effect on the economy.

[aztecdakota]

Bush gave 850 Billion dollars to big business. This is almost a TRILLION, aint saving anything , is it? It is what you do with that amount that can save this nation. Of the people, by the people and for the people. Is ANYONE getting this message, besides Thomas Jefferson? get real

[remrafbn]

txgrouch said "There will be blood in the streets this year."

There''s blood on the streets every year. There''s American blood on the streets of Iraq. We should not have any there.

[remrafbn]

txgrouch said "Sorry. You''re way too logical to do government work."

Education is government work and you were FIRED from that job. Your claims are extremely illogical so maybe that is why they TERMINATED you!~

[windmaster12]

Bush Sept. 08
"The fundamentals of our economy are sound"

He must have meant for the upper3%
However-
What we do need to do is change the tax structure!!!

I think we need to go to a flat income tax of 12%
A capital gains tax of 15%
An import duty of 8% on all imported goods
And a National sales tax of 5% on all products

Simplify the stupid Tax system
Get rid of all the loopholes

A 15% capital gains would spur business --
Increasing domestic spending and Manufacturing

An Import duty would bring in Trillions
To a Gov''t that''s cash starved --

And in the end changing the tax structure would
even the playing field.

We need something new that''s for sure
Steve Forbes has it right.

[comeon11]

stop calling people sheep. you are are sheep yourself. you followed ideologies created by other men (they also had their agendas). if you are an extreme liberal or an extreme conservative- you are about the same.

[jckbrn-2009]

The President nor the VP add ''earmarks'' - - and the taxing and spending is done by ''bring home the bacon Congress'' dummy ! ! ! ! !
And they have no term limits like the president - they stay in office for life dummy ! ! !
Those elected officials approve a pay raise for themselves, spend your money and raise your taxes - and you blame the President and his relatives ? ? ?
And you really think your newly elected savior can end all that - based on his experience and background ? ! ? !

[stinginrich]

12/19/2008
ASIA - UNITED STATES

U.S. Debt Approaches Insolvency;
Chinese Currency Reserves at Risk
by Maurizio d''Orlando

In a few months, America''s public debt has grown to more than 100% of GDP. Fear of a valuation crisis for the dollar, with tremendous consequences for Asian countries, major exporters to the United States.


Milan (AsiaNews) - In the United States, the danger of debt insolvency is growing, putting at risk the currency reserves of foreign countries, China chief among them. According to new figures published by Bloomberg in recent days (Nov. 25, 2008), the American government has employed a total of 8.549 Trillion Dollars to stop the financial crisis. This means a total of about 24-25.4 Trillion Dollars of direct or indirect public debt weighing on American taxpayers.

http://www.asianews.it/index.php?l=en&art=14054&size=A

Actual U.S, Debt is around $60 Trillion, so this story is total bullsh*t. Get ready to see things you never imagined possible. Collapse of Social Safety-Net Programs like Unemployment Insurance and Food Stamps, Massive Tent Cities of Homeless and Destitute Families, Shortages of basic necessities, Food Riots, Martial Law......
It''s going to get really, really, REALLY, bad.
Get ready now or be sorry later.....

[clew37]

If Obama would only cut out pork-barrel spending and earmarks to fat cat congressmen, I''ll bet he could save a good trillion right there.

[aztecdakota]

Well Bush''s last act was to give away almost a trillion dollars to big business, Americas WORST PRESIDENT EVER!!! Us American people? Heh, after Cheney''s ''Haliburten'' oil company at the Iraq oil wells preformance, and fleecing us on the gas prices while he and Bush had the power, heeh, they about decimated the United States of America. Poor Obama has his work set out for him, what a mess they left for that guy.

[huupuh]

What Reagan, Bush and the big tax breaks for the rich now we know just how it works for the working people in his country thanks to all you Republicans.