CBO: Obama understates deficits by $2.3 trillion

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    Mar 19, 2011 5:06 PM GMT
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    http://finance.yahoo.com/news/CBO-Obama-understates-apf-1323525507.html?x=0

    WASHINGTON (AP) -- A new assessment of 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 estimated cost of the new health care law increased by about $90 billion, to $1.13 trillion, from 2012-2021. But the budget office didn't issue a new estimate of the taxes and savings in the legislation that pay for Obama's expansion of health insurance.
  • conservativej...

    Posts: 2465

    Mar 19, 2011 5:24 PM GMT

    It is a foregone conclusion to me that the U.S. will run large deficits over the coming years. There will be points along the timeline when we will have opportunities to reduce the deficit with diminishing effectiveness. One of those comes in 2012 followed by whoever comes into office in 2013.

    There are many who began even in the Bush years to position themselves for the inevitable consequences of a world that will no longer pay homage to America's appetite for indebtedness as a means to float a broad range of activities in federal government. Governments are never self-sufficient as they are not a capitalist business with product produced and profit generated. Government is a drag on everything else, even when redistributing wealth in whatever form: generation of debt or taxation.