W.H., Congress Project Record Deficits

Obama Estimates $9 Trillion Deficit Over Ten Years; Congressional Budget Office Says $7.14 Trillion

(AP)  Updated 12:34 p.m. ET

The federal government faces exploding deficits and mounting debt over the next decade, White House and congressional budget officials projected Tuesday in competing but similar economic forecasts.

Both the White House Office of Management and Budget and the nonpartisan Congressional Budget Office predicted the budget deficit this year would swell to nearly $1.6 trillion, a record, and far above the then-record 2008 budget deficit of $455 billion.

But while figures released by the White House foresee a cumulative $9 trillion deficit from 2010-2019, $2 trillion more than the administration estimated in May, congressional budget analysts put the 10-year figure at a lower $7.14 trillion.

One reason for the difference: The CBO projection is based on an assumption that all the tax cuts put into place in the administration of former President George W. Bush will expire on schedule by 2011 as dictated by current law. President Barack Obama's budget baseline, however, hews to his proposal to keep the tax cuts in place for families earning less than $250,000 a year.

Beyond the 10-year forecast, the nation will face further challenges posed by rising health care costs and the aging of the population, the CBO said. "The budget remains on an unsustainable path" over the long-term and will require some combination of lower spending and higher tax revenues, it said.

Both forecasts see unemployment rising to 10 percent before falling and both suggest growth will return to the economy later this year but that recovery will be slow after the longest and deepest recession since the 1930s

"This recession was simply worse than the information that we and other forecasters had back in last fall and early this winter," said Obama economic adviser Christina Romer.

She predicted unemployment could reach 10 percent this year and begin a slow decline next year. Still, she said, the average unemployment will be 9.3 in 2009 and 9.8 percent in 2010. The CBO had similar figures.

Both see the national debt - the accumulation of annual budget deficits - as nearly doubling over the next day. The total national debt, made up of amounts the government owes to the public, including foreign governments, as well as money it has borrowed from itself, stood Tuesday at a staggering $11.7 trillion.

Obama himself may have drowned out the rising deficit news with the announcement Tuesday that he intends to nominate Ben Bernanke to a second term as chairman of the Federal Reserve. The Bernanke news, and a report that consumers are regaining some confidence, may have neutralized any disturbance in the financial markets caused by the high deficit projections. Stocks were up in late morning trading.

The deeper red ink and the gloomy unemployment forecast present Obama with an enormous challenge. The new numbers come as he prods Congress to enact a major overhaul of the health care system - one that could cost $1 trillion or more over 10 years. Obama has said he doesn't want the measure to add to the deficit, but lawmakers have been unable to agree on revenues that cover the cost.

What's more, the high unemployment could last well into the congressional election campaign next year, turning the contests into a referendum on Obama's economic policies.

Republicans pounced.

"The alarm bells on our nation's fiscal condition have now become a siren," Senate Minority Leader Mitch McConnell, R-Ky., said. "If anyone had any doubts that this burden on future generations is unsustainable, they're gone - spending, borrowing and debt are out of control."

The revised White House estimates project that the economy will contract by 2.8 percent this year, more than twice what the White House predicted earlier this year. Romer projected that the economy would expand in 2010, but by 2 percent instead of the 3.2 percent growth the White House predicted in May. By 2011, Romer estimated, the economy would be humming at 3.6 percent growth.

Both Romer and budget director Peter Orszag said this year's contraction would have been far worse without money from the $787 billion economic stimulus package that Obama pushed through Congress as one of his first major acts as president.

At the same time, the continuing stresses on the economy have, in effect, increased the size of the stimulus package because the government will have to spend more in unemployment insurance and food stamps, Orszag said. He said the cost of the stimulus package

which spends most of its money in fiscal year 2010 - will grow by tens of billions of dollars above the original $787 billion.

For now, while the country tries to come out of a recession, neither spending cuts nor broad tax increases would be prudent deficit-fighting measures. But Obama is likely to face those choices once the economy shows signs of a steady recovery, and it could test his vow to only raise taxes on the wealthy.

Still, 10-year budget projections can be "wildly inaccurate," said Stan Collender, a partner at Qorvis Communications and a former congressional budget official. Collender notes that there will be five congressional elections over the next 10 years and any number of foreign and domestic challenges that will make actual deficit figures very different from the estimates.

The Obama administration did tout one number in its budget review: The 2009 deficit is now expected to be $1.58 trillion, $263 billion less than projected by the White House in May. That's largely because the White House removed a $250 billion item that it had inserted as a "place holder" in case banks needed another bailout.

[TheVarsityClub]

"Nothing is more powerful than a well informed public.".....J.Edgar Hoover, Former Head of the FBI

I would like to thank everybody for the interesting read tonight.

"You cannot have Democracy without a well informed public.".....Helen Thomas, White House Corespondent

[plantain11]

For those that didn't read the article and are here simply to throw stones, this quote is worth pondering. The CBO's update said that, "Unless changes are made to current policies, the nation will face a growing demand for budgetary resources caused by rising health care costs and the aging of the population."

[troutfishyman]

by peter5548 August 25, 2009 5:26 PM EDT
For the record, the 99.9% of conservatives and republicans are outraged by how much Bush added to the national debt.


Yet no doubt you voted for him twice. Go figure.

[specialty8]

So does this mean you won't vote for Obama twice? After all he is breaking all records as spender in cheif.Go figure.

[velma179]

speciality8...

Please refer to my comments above that explain little things like facts.

1) Iraq war -- not "on the books" in Bush's debt/deficit numbers. Obama does the honest thing and adds it in.

2) TARP legislation adds $700 billion -- this occurs in fiscal 2009, even though it was not an Obama administration initiative, it was GW Bush administration initiative.

3) keeping the books is an ongoing thing -- we don't just hit STOP, then RESET when a new administration comes in.

4) Anything Obama has actually done is fair game, what he inherited isn't. This will also be true for the presidential administration that succeeds his (whether it be in 2013 or 2017).

[specialty8]

Hungry, yes Turbo Timmy the tax cheat. Obama has the wolf watching the hen house. He was to dumb to use turbo tax that a 5 year old could use, or so he says.

[peter5548]

For the record, the 99.9% of conservatives and republicans are outraged by how much Bush added to the national debt. The total cost of the Iraq war was less than 25% of what he added Obama is making that look like chump change. Its all bad, both Bush and Obama. Most of you Obama zombies don't reaize that the Obama debt will destroy your future. He is ripping you off. Nothing is free.

[velma179]

Here I thought you were one of the rational minded posters.. peter5548.

The "Obama zombies" and "Obama debt" phrasing sure changes my mind.

What a disappointment -- I always hope to have someone with objectivity to agree and to disagree with, you know... debate, discuss.

Dang.

[troutfishyman]

The majority of conservatives did not seem to give a flying fig about deficits when Bush was in. Now they are suddenly all deficit hawks. What a bunch of hypocrites.

[peter5548]

velma179 - Fiscal 2009 ends in a month, so I think they have a good idea what the numbers are going to be.

[velma179]

Yep peter...

And I am so glad you mentioned it -- so I don't get the heat from the name callers when I bring up a pretty glaring fact.

FACT: Fiscal 2008 ended in Sept 2008. The TARP legislation was passed in October.

Which means that entire amount is included in the difference between the $455 billion from end of 2008 [under the previous administration] and the 1.6 trillion projected for end of 2009 [under the current administration].

Saying that Obama is responsible for that money is patently WRONG.

I'd say 700 billion is a pretty big chunk of the projected deficit difference -- even though some has been repaid.


Now -- let's remember that it is wrong to blame any one president or administration for a debt/deficit accumulation that is more like a train moving down the track with no driver than anything else. This train wreck has been coming along for some time...

I'd love to see us discuss solutions rather than blame.

[peter5548]

How can Bush be responsible for what obama spend over the next 10 years? This is Obama's issue. The Bush tax cuts expire in 2010. Obama pledged to end the Iraq war. He owns the whole $9 trillion shortfall.

[hungry1968-16]

by specialty8 August 25, 2009 5:13 PM EDT
No its called Obama and Geithner math.Turbo Timmy,Pelosi, Reid Barney, and side kick Obama have come up with this new math that turns a dollar into a billion dollars. Nobody knows how it works but them. I am working on it to figure it out but the numbers just don't add up anyway I do it.






"Turbo Timmy"?

What are you - 8 years old?

[specialty8]

No its called Obama and Geithner math.Turbo Timmy,Pelosi, Reid Barney, and side kick Obama have come up with this new math that turns a dollar into a billion dollars. Nobody knows how it works but them. I am working on it to figure it out but the numbers just don't add up anyway I do it.

[rbstrcklnd]

Beckie Best, contrary to what you stated, most conservative republicans did not approve of Bush's spending. It's getting a little old blaming everything on Bush. Are you so blind that you will make excuses for any politician just because you belong to their party?

[the_majesty]

Obama strikes again...Then runs and hides...Some leader we have...

[specialty8]

Stopping spending with Pelosi, Reid, Barney and the bill signer Obama is like telling a addict to stop smoking or drinking. They are addicted to handouts.

[peter5548]

What most Dem's don't seem to undertand is that Obama plans to add an additional 9 trillion to the deficite over the next 10 years. Even the most blind Obama zombie can't possible blame Bush for what the government spends over the next 10 years. Remember, the Bush tax cuts expire next year, so you can't use that tired excuse.

[hungry1968-16]

by xlib August 25, 2009 4:54 PM EDT
So the Iraq war has quadrupled the deficit in 8 months? Um, more liberal reasoning.
So,libtard, why doesn't your dem congress and thug totus just defund the war?? They did it to end Vietnam, do it now.

The spending and printing of money by your party is the sole cause of all this. And, if they have their way,it won't stop any time soon.







What are you - eight years old?

You "type" so childishly.

If you want debate, try growing up first.

[hungry1968-16]

by xlib August 25, 2009 4:54 PM EDT
So the Iraq war has quadrupled the deficit in 8 months? Um, more liberal reasoning.
So,libtard, why doesn't your dem congress and thug totus just defund the war?? They did it to end Vietnam, do it now.

The spending and printing of money by your party is the sole cause of all this. And, if they have their way,it won't stop any time soon.







What are you - eight years old?

You "type" so childishly.

If you want debate, try growing up first.

[hungry1968-16]

by Mortarman29 August 25, 2009 4:44 PM EDT
Sorry, I want my healthcare to be NOT singlepayer because I dont want to save money...I want to get the best healthcare possible. I dont want lines, I dont want waits...and I dont want to be denied care.

All of those supposed great socialist systems you want to espouse are rife with all of those things.

Sorry! When it comes to my health and the health of my family...I want the government out of it. Completely!







Why do you think that you will get inferior treatment from the same doctor, in the same hospital, because you have a different insurance provider?

[wmsshields]

I have this nasty mental image of Obama and Michelle dancing in their ritzy vacation getaway, to the tune of "We've only Just Begun". By the way, I am sure it is mere coincidence that the first day of BoBo's vacation was also the first day of Ramadan.

[hungry1968-16]

by trapbreaking August 25, 2009 3:29 PM EDT
How Obama is spending your money

1800 notices sent out by the VA that veterans had a fatal ailment and were eligible for disability benefits.

CHARLESTON, W.Va. - The U.S. Department of Veterans Affairs is looking into how many veterans received erroneous letters saying they had been diagnosed with Lou Gehrig's disease.

..............


This is the government you want running health care?






So your contention is that NOTHING LESS than perfection will EVER be acceptable from the government, ever again?

Seriously?


How do you think this "error" compares to invading a country for no reason whatsoever?

[trapbreaking]

by ubrew12 - We spend $2.3 trillion a year on healthcare

We? The government?


.