Obama Budget Would Add $2 Trillion More To Debt Than White House Claimed

By William Warren

The Congressional Budget Office (CBO) says the Obama budget deficit impact would actually be more than $2 trillion higher than White House claimed. “Compared with the Administration's estimates, CBO's estimates of the deficit under the President's budget are lower for 2011 (by $220 billion) but higher for each year thereafter (by a total of $2.3 trillion over the 2012–2021 period). That disparity stems from differences in the underlying projections of what would happen under current law ($1.3 trillion) as well as from differing assessments of the effects of the President's proposals ($1.0 trillion).”

Take a lot for yourself; Read the full CBO Report!

In The Hill on Friday, Erik Wasson proclaimed CBO: Obama budget worse than claimed on deficit. Below is a brief excerpt of some of his comments:

The Congressional Budget Office on Friday released its analysis of President Obama’s 2012 budget proposal and found that it does less to rein in deficits and the debt than the administration had estimated.

The CBO estimates that ten years of deficits would add up to $9.5 trillion under the Obama plan and by 2021 the debt held by the public would total 87 percent of gross domestic product.

The administration, using its own methods, had said that in total the Obama 2012 budget would reduce the combined deficits by $1.1 trillion over ten years, bring the ten years of deficits down to a total of $7.2 billion. It had also forecast that debt would be 77 percent of GDP by 2021.

CBO concludes that s, “if all of the President's budgetary proposals were enacted, they would add $26 billion to the baseline deficit for 2011. As a result, the 2011 deficit would total $1.43 trillion, or 9.5 percent of gross domestic product (GDP).”

In 2012, Obama policies would increase the deficit by $83 billion compared to current law.

The biggest reason for the deficits are the extension of the Bush-era tax cuts for the middle class and changes to the Alternative Minimum Tax that Obama favors in this budget, the CBO states.

As a result of the tax policy, there is a $2.7 trillion net increase in the deficit over the next 10 years.

“The President's other proposals would reduce the deficit, on balance, over 10 years,” the CBO concludes.

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