President Barack Obama’s budget released Friday says the White House underestimates future budget deficits by more than $2 trillion over the upcoming decade.
The estimate from the nonpartisan Congressional Budget Office says that if Obama’s February budget submission is enacted into law it would produce deficits totaling $9.5 trillion over 10 years — an average of almost $1 trillion a year.
Obama’s budget saw deficits totaling $7.2 trillion over the same period.
The difference is chiefly because CBO has a less optimistic estimate of how much the government will collect in tax revenues, partly because the administration has rosier economic projections.
But the agency also rejects the administration’s claims of more than $300 billion of that savings — to pay for preventing a cut in Medicare payments to doctors — because it doesn’t specify where it would come from. Likewise, CBO fails to credit the White House with an additional $328 billion that would come from unspecified “bipartisan financing” to pay for transportation infrastructure projects such as high speed rail lines and road and bridge construction.
Friday’s report actually predicts the deficit for the current budget year, which ends Sept. 30, won’t be as bad as the $1.6 trillion predicted by the administration and will instead register $200 billion less. But 10 years from now, CBO sees a $1.2 trillion deficit that’s almost $400 billion above White House projections.
The article continues:
The estimate adds urgency to calls on Capitol Hill for action on runaway deficits that many economists fear — if left unchecked — could trigger a European-style debt crisis that could force draconian measures such as cutting federal benefits for seniors or forcing broad-based tax increases.
Just on Friday, 64 senators — 32 in each party — signed a letter to Obama calling on him to take the lead in coming up with a comprehensive deficit reduction plan along the lines of a plan issued last year by his own deficit commission. That plan called for a comprehensive overhaul of the tax code that would trade dozens of expensive tax breaks for lower individual and corporate rates, curb Social Security benefits and clamp down on spending across the budget.
“While we may not agree with every aspect of the commission’s recommendations, we believe that its work represents an important foundation to achieve meaningful progress on our debt,” the senators wrote. They said that “with a strong signal of support from you, we believe that we can achieve consensus on these important fiscal issues.”
Conversely, the report is a sobering blow to House Republicans charged with developing a budget blueprint that could satisfy its core supporters in the tea party. Republican lawmakers had already acknowledged that they won’t be able to generate a budget that comes to balance by the end of the decade. Friday’s news makes that task even more difficult.
I too think that both the president and Congress should reconsider the commission’s recommendations, as well as adding other actions items to get the raging deficits under control.
Our member of Congress, Lynn Woolsey never wants to cut anything except military spending, and last year, she took a misinformed swipe at the deficit commission, claiming, “Social Security…has not contributed a dime to that deficit….” As explained in that blog entry back in August, Rep. Woolsey was wrong. Since then, many who had insisted that Social Security should be exempt from any revamping are rethinking. Congresswoman Woolsey should also. She and her staff should also be educating themselves about the potentially disastrous effect that these trillions of dollars of debt could do to our country. She seems to live in the present, always complaining when the House majority votes to cut programs, always urging MORE spending on her pet items. But she is remarkably short-sighted when she takes this position because by spending TRILLIONS now, she and those who agree with her are condemning future generations (her own grandchildren, for example) to an unfair yoke of repaying these incredible sums. This is not right! This generation must not spend more than what it earns, and it must not leave future generations hopelessly in hock!