Excuse me… I think I’m going to be sick and there won’t be any Medicare to pay the doctor’s bill.
Did I just read the budget is now “expected” to be $2.3 trillion over the “expected” incredible deficit the Administration was “expecting”… we’re looking at a $3.6 trillion budget starting with the fiscal year that begins October 1? And, according to the nonpartisan Congressional Budget Office (CBO), based on this, “the nation’s debt would grow to 82 percent of the overall economy by 2019 under Obama’s policies, compared with a pre-recession average of 40 percent.” That is not reducing the deficit by half.
Can the President quit?
I know he can get fired, but can he quit?
I read this and am amazed by the fact that we are letting this happen. If what I’m reading is true, we have to wonder what will the unemployment rate be or reach before it turns around?
Since 1948, the highest unemployment rate was in 1983, when it was near 11 percent. I remember those times. They were worse than horrible. I also remember credit card interest rates that were 27 percent and mortgages that kissed 17 percent. We survived all those and many more disasters. But, have we ever faced a national debt that was 82 percent of the overall economy?
Is our economy like a snowball rolling downhill, or is it more like that snowball dropping off a cliff? If it’s rolling downhill it can be slowed, diverted or stopped. If it’s the snowball falling off a cliff…
According to Congressional budget analysts, deteriorating economic conditions will cause the federal deficit to soar past $1.8 trillion this year and leave the nation wallowing in a sea of red ink far deeper than the White House had previously estimated.
Just what is the deficit or National Debt?
The primary deficit is the year-by-year gap between what the federal government spends and the revenue it generates. The total deficit (which is often just called the ‘deficit’) is spending, plus interest payments on the debt, minus tax revenues. So, even if annual deficits are cut, the overall national debt will continue to grow so long as there is no surplus. The debt now stands at around $11 trillion, with about $6.5 trillion owed to individuals, corporations and governments and other lenders, foreign or domestic, while about $4.3 trillion is owed to the funds for Social Security benefits, military and civil service pensions and other government programs.
China tops the list ($681.9 billion) of foreign holders of U.S. debt, followed by Japan ($577.1 billion) and the United Kingdom ($360 billion).
In the first independent analysis of President Obama’s budget request, the CBO’s report predicted that the Administration’s agenda would generate deficits averaging nearly $1 trillion a year over the next decade — $2.3 trillion more than the President predicted when he unveiled his spending plan only a month ago.
As estimated by CBO and the Joint Committee on Taxation, the President’s proposals would add $4.8 trillion to the baseline deficits over the 2010–2019 period. CBO projects that if those proposals were enacted, the deficit would total $1.8 trillion (13 percent of GDP) in 2009 and $1.4 trillion (10 percent of GDP) in 2010. It would decline to about 4 percent of GDP by 2012 and remain between 4 percent and 6 percent of GDP through 2019.
By the CBO’s estimate, for example, the nation’s debt would grow to 82 percent of the overall economy by 2019 under Obama’s policies, compared with a pre-recession average of 40 percent.
And although Obama would come close to meeting his goal of cutting the deficit in half by the end of his first term, the CBO predicts that the nation’s annual operating deficit would never drop below 4 percent of the overall economy over the next decade, a level Administration officials have said is unsustainable because the national debt would grow too rapidly.
If carried out, President Obama’s budget proposals, would produce a staggering $9.3 trillion in total deficits over the next decade, much more than the White House has predicted, the Congressional Budget Office said on Friday.
The economy is likely to continue to deteriorate for some time, but the enactment of the American Recovery and Reinvestment Act (ARRA) and very aggressive actions by the Federal Reserve and the Treasury are projected to help end the recession in the fall of 2009. In CBO’s forecast, on a fourth-quarter-to-fourth-quarter basis, real (inflation-adjusted) GDP falls by 1.5 percent in 2009 before growing by 4.1 percent in both 2010 and 2011.
The new report could complicate efforts to win Congressional approval for Obama’s $3.6 trillion budget request for the fiscal year that begins Oct. 1. Democrats in the House and Senate are currently putting the finishing touches on their versions of Obama’s spending plan, which calls for an expensive expansion of health coverage for the uninsured and new spending on education programs, as well as a first-time tax on greenhouse gas emissions.
Democrats hope to approve the measure before the Easter recess.
Senate Budget Committee Chairman Kent Conrad (D-ND) has said the gloomier CBO forecast would require “adjustments” to Obama’s budget, though he declined to specify what changes would be necessary. To reduce the deficits, Democrats could cut Obama’s spending plans or find new sources of revenue.
After meeting with Obama at the White House this week, Conrad said the President “understands the legislative process” and that “it’s going to require everyone to make adjustments.”
But other Democrats are not necessarily ready to follow Conrad’s lead. At her weekly news conference on Thursday, House Speaker Nancy Pelosi (D-CA) dismissed the expectation of bad news from CBO, the official budget scorekeeper for Capitol Hill, saying differences between that agency and the White House budget office are “not unusual.”
“President Obama’s budget will cut the deficit in half, even using CBO’s more pessimistic numbers, by making smart investments, cutting non-defense domestic discretionary spending to its lowest level in nearly half a century, and ending an era of irresponsibility and gimmicks.
“Over the next two weeks, I expect the House Budget Committee to produce, and the entire House will approve, a budget resolution that reflects the President’s priorities and will help usher in a new era of job creation and lasting prosperity for the American people,” said Pelosi.
“Our priorities are the same,” Pelosi added. “This budget is a statement of our values and our investments in education, health care and the health of America. That includes prevention as well
as care, and the energy initiatives as well as tax relief for 95 percent of the American people, as well as an approach that takes the deficit down. Those are the priorities of the budget.”
White House budget director Peter Orszag made the same point. “There are always some adjustments,” Orszag said of the legislative budget process. “But those four pillars” — health care, education, clean energy and deficit reduction — will be represented.”
Senator Chuck Grassley (R-IA), ranking minority member on the Finance Committee, as well as a senior member on the Budget panel, said Congress and the White House need to get the message that the new figures embody.
“The buck stops with the American taxpayer. People can afford only so much government spending, even for the worthiest-sounding causes. The White House should take a break from the heavy sales job on the budget and explain missing the mark on red ink by $2.3 trillion,” he said in a statement.
Representative John A. Boehner of Ohio, the House Republican minority leader, had a similar reaction. He said, “This report should serve as the wake-up call this Administration needs. We simply cannot continue to mortgage our children and grandchildren’s future to pay for bigger and more costly government. Families and small businesses across America are making difficult budget decisions each and every day during this recession, and it’s time for Washington to do the same. Unfortunately, the President’s budget doesn’t do that. Instead it will hurt the economy and destroy jobs by spending too much, taxing too much, and borrowing too much, and today’s report confirms it. The President ought to be straight with the American people: will he have to raise taxes even higher than initially proposed to pay for this increasingly costly budget?”