CBO Report Confirms: Obama’s Budget Laden with Debt

Emily Goff / March 18, 2011

Coloring President Barack Obama’s budget proposal for fiscal year (FY) 2012 are the undeniable shades of masked fiscal disaster and a want of long-term solutions.

According to analysis (pdf) by the Congressional Budget Office (CBO), the President’s budget would result in $1.43 trillion and $1.16 trillion deficits for FYs 2011 and 2012, respectively, adding two more years of annual deficits in excess of $1 trillion. Total spending would increase by 57 percent over the next decade, from $3.7 trillion this year to $5.8 trillion in 2021. Net interest alone mushrooms from $214 billion to $931 billion, a 335 percent increase.

The President’s budget, CBO reports, would have deficits that average $947 billion over the next 10 years. Rather than driving deficits down, the President’s budget would increase them 23 percent over the course of the decade. While Obama’s budget people claim (pdf) that the 10-year deficit would total $7.2 trillion, under CBO’s more realistic (though still flawed) assumptions, annual deficits would total $9.5 trillion. The President’s budget says that debt held by the public will reach nearly $19 trillion by 2021, yet CBO reports that it will double to nearly $21 trillion in 2021. According to CBO, debt as a share of the economy will increase from 69 percent of GDP to 87 percent. Such a path is clearly unsustainable and demonstrates the need for deep reductions in federal spending if debt is to be brought under control. (more…)