CBO says the Federal Budget Deficit would be $2.3 Trillion, yes, TRILLION,higher than Predicted
Mar 18, 2011 2 Comments ›› Pat Dollard
The nonpartisan Congressional Budget Office says the federal budget deficit would be $2.3 trillion — yes, trillion — higher than the Obama administration predicted for the plan the White House submitted to Congress last month.
The difference, the CBO says in a report released Friday, stems from vastly different projections about the effect of current law on revenues and mandatory spending, and also differing projections about the effects of Obama’s own policies.
Altogether, the report raises significant questions about the administration’s projections, as well as the White House’s mantra of responsibility in government.
Republicans have already seized on the report, saying that Obama has always overstated his administration’s posture on deficit reduction, and the CBO has only confirmed what they have said all along: that the president’s budget actually raises the deficit over time, instead of lowering it.
“In short, the CBO analysis proves that the president’s budget accelerates our dangerous and unsustainable trajectory. It is the most irresponsible spending plan a president has put forward in our time,” said Jeff Sessions, the Senate Budget Committee’s ranking Republican.
The CBO cites differences in the budgetary effects of Obama’s programs, such as a freeze on Medicare’s payment rates to physicians, increased transportation spending, and the cost of military engagement in Afghanistan and Iraq.
In response, the White House says its spending proposals — principally the transportation initiatives — would be paid for or else the administration would not advocate for them, a fact they say the CBO did not take into consideration in their scoring.
Budget Director Jack Lew also said that differing assessments of the state of the economy also contributed.
“The economic forecast in our 2012 Budget, which was prepared in November 2010, is actually more cautious than the consensus forecast for 2011, and is well within the range of the Federal Reserve’s assumptions in all years,” Lew said in a statement. “Beyond the short-term, we believe that the economy will fully recover after this recession as it has after previous ones.”
Nonetheless, he welcomed the CBO’s assessment.
“But regardless of our differences, CBO confirms what we already know: current deficits are unacceptably high, and if we stay on our current course and do nothing, the fiscal situation will hurt our recovery and hamstring future growth,” Lew said.
