CBO: Obama underestimated deficit by $1.2 trillion

The Congressional Budget Office reported Friday that President Barack Obama’s budget would increase the U.S. deficit in the period from 2011 to 2020 by $1.2 trillion more than the White House has claimed:

The CBO report fueled immediate criticism from Republicans who said Obama was raising U.S. government debt to “alarming” levels.

“Measured relative to the size of the economy, the deficit under the President’s proposals would fall to about 4 percent of GDP (Gross Domestic Product) by 2014 but would rise steadily thereafter,” the CBO said in a preliminary analysis.

CBO, a nonpartisan agency, said the deficit will continue at a level above 4 percent of GDP for the foreseeable future, and publicly held debt will soar to $20.3 trillion, which will be 90 percent of GDP by 2020:

By then, interest payments on the debt will have quadrupled to more than $900 billion annually, the report said.

Economists generally consider deficits topping 3 percent of GDP to be unsustainable because that means government debt is growing faster than the ability to pay back the money.

“The news today from CBO is clear: The president’s budget will continue to lead our nation into a fiscal catastrophe — an ever worse one than the president’s own numbers suggest,” said Representative Paul Ryan of Wisconsin, the top Republican on the House Budget Committee.

Though Obama has been in the Oval Office for well over a year, his OMB director Kenneth Baer continued the Obama White House practice of blaming its failures on George W. Bush:

“What is certain is that the irresponsibility of the past put the country on an unsustainable fiscal trajectory.”

But just over a year ago, after former President Bush had moved to Dallas and Obama into the White House, the rookie president promised to cut the deficit in half. He cannot simply continue to keep breaking his promises and blaming Bush. That old dog is tired and won’t hunt any longer.

- JP

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