WASHINGTON: President Barack Obama’s budget would generate deficits averaging almost $1 trillion a year over the next decade, according to the latest US congressional estimates, significantly worse than predicted by the White House just last month.
The Congressional Budget Office figures, obtained by The Associated Press yesterday, predict Obama’s budget will produce $9.3 trillion worth of red ink over 2010-2019. That’s $2.3 trillion worse than the White House predicted in its budget.
Worst of all, the budget office says the deficit under Obama’s policies would never go below 4 percent of the size of the economy, figures that economists agree are unsustainable. By the end of the decade, the deficit would exceed 5 percent of gross domestic product, a dangerously high level. The latest figures, even worse than expected by top Democrats, throw a major obstacle at efforts to enact Obama’s budget, which promises universal health care for all and higher spending for domestic programs like education and research into renewable energy.
Many Democrats were already uncomfortable with Obama’s budget, which promises to cut the deficit to $533 billion in five years. The budget office or CBO says the red ink for that year will total $672 billion.
The worsening economy is responsible for the even deeper fiscal mess inherited by Obama. As an illustration, CBO says that the deficit for the current budget year, which began Oct. 1, will top $1.8 trillion, $93 billion more than foreseen by the White House. The 2009 deficit, fueled by the $700 billion Wall Street bailout and diving tax revenues stemming from the worsening recession, is four times the previous $459 billion record set just last year.
The CBO’s estimate for 2010 is worse as well, with a deficit of almost $1.4 trillion expected under administration policies, about $200 billion more than predicted by Obama. By the end of the decade, the deficit under Obama’s blueprint would go back up to $1.2 trillion. Democrats in Congress are readying Obama’s budget for preliminary votes next week, and they promise to cut the deficit in half within five years. Democrats are likely to curb somewhat Obama’s request for a 9 percent increase in non-defense agency budgets.
Obama’s $3.6 trillion budget for the 2010 fiscal year beginning Oct. 1 contains ambitious programs to overhaul the US health care system and initiate new “cap-and-trade” rules to combat global warming.