Today in Washington, D.C. - Feb 1, 2010 - Obama's Budget: A $1.6 Trillion Deficit - More Spending, Taxes & Debt

The Senate reconvened at 2 PM today and began consideration of the nomination of Patricia Smith to be solicitor for the Labor Department with a vote at 5:30 PM on her nomination. Sen. Harry Reid has also filed cloture on the nomination of Martha Johnson to head the General Services Administration.

This morning, the Obama administration released its new budget for Fiscal Year 2011. This $3.8 trillion proposal outweighs even last year’s record-breaking $3.7 billion budget and, The New York Times reports, the projected deficit for next year would reach an unprecedented $1.6 trillion.

According to The New York Times, “A deficit of that size for the fiscal year that ends Sept. 30 would be about $150 billion greater than last year’s deficit, which was the highest since World War II. Measured against the size of the economy, a $1.6 trillion shortfall would equal almost 11 percent of the gross domestic product. Economists generally consider annual deficits above 3 percent to be unsustainable.” And Politico reports, “The outlook— more pessimistic than Congressional Budget Office deficit estimates last week—adds up to $5.08 trillion in red ink over the next five years.”

Reacting to President Obama’s new budget proposal, Sen. Judd Gregg, ranking Republican on the Senate Budget Committee, said, “The President has sent us more of the same – a budget that claims to be fiscally responsible, but just below the surface contains more spending, more borrowing and more taxes.” Appearing on Fox News this morning, Sen. Gregg warned, “[T]his is fiscal insanity, to continue to grow the government the way we are, continue to spend the way we’re spending, continuing to raise the debt the way we are—we’re going to pass on a country that’s insolvent to our children.”

Little wonder that Reuters reported last week, “American voters are becoming more anxious about the U.S. budget deficit in an election year dominated by fears of high unemployment, creating a potential albatross for President Barack Obama and his Democratic party.” Karlyn Bowman, a polling analyst at the American Enterprise Institute told Reuters, “The public has had a kind of cumulative sticker shock. . . . You just get the sense from a lot of different polling data that people are more concerned about the size and the scope of government right now.”

This year’s budget proposal seems to do little to assuage the fears of Americans: a record $1.6 trillion deficit, leading to an incomprehensible total of over $5 trillion in debt over the next five years. President Obama spoke about the new budget today, saying, “We simply cannot continue to spend as if deficits don’t have consequences; as if waste doesn’t matter; as if the hard-earned tax dollars of the American people can be treated like monopoly money and can ignore this challenge for another generation. We can’t.” He’s right about that, but this new budget is unfortunately more of the same: more spending, more taxes, and more debt.

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