Ryan Streeter
Given the breaking news in Libya and chatter about Obama’s Brazil trip, not to mention the ongoing coverage of Japan, the CBO’s preliminary review of Obama’s budget yesterday hasn’t gotten that much attention. It’s Friday release also ensured that it land quietly in the public square.
It’s another one of those startling CBO documents that we’ve practically grown accustomed to. As Roll Call put it, it’s “$2.3 trillion more pessimistic” than Obama’s budget.
Here is what know, summarized from the CBO director Doug Elmendorf’s blog:
- Deficits will be much worse. Deficits would total $9.5 trillion between 2012 and 2021. That’s nearly $1 trillion each year and looks a lot worse than the already-bad $7.2 trillion Obama’s own budget projected. CBO shows the deficit getting uncomfortably above 4% of GDP and never dipping below, keeping us well above the 3% range that is generally considered "safe."
- Federal debt held by the public would double under the President’s budget. It will grow from $10.4 trillion at the end of 2011 to $20.8 trillion at the end of 2021.
- Interest on debt will noticeably begin its nasty spike that will only get worse after 2021. Net interest payments would nearly quadruple in nominal dollars (without an adjustment for inflation) over the 2012–2021 period and would increase from 1.7 percent of GDP to 3.9 percent.
- The era of big government is definitely not over. Total outlays would equal 24.2 percent of GDP in 2021—about 0.3 percentage points above CBO’s baseline projection for that year and well above the 40-year average for total outlays, 20.8 percent.
This morning, Keith Hennessey nicely contrasts the President’s February 15 words with what the CBO projections show (obviously the result of different methods used by the CBO and the President’s OMB).
In February Obama:
- Said he would cut the deficit in half by the end of his first term. CBO says he won’t.
- Said he would get spending and revenues equalized by the middle of this decade. CBO says he won’t.
- Said he won’t add any more to the national debt. CBO says he will.
Wait, wait, wait. During discussions of the healthcare reform law, you told us to ignore the CBO projections. Now we're supposed to listen to them? I guess the criteria for listening to the CBO is whether or not they agree with the conservative agenda.
Posted by: christine | March 19, 2011 at 02:15 PM