Saturday, March 21, 2009
Obama administration underestimates deficit by $2.3 trillion; quick, somebody find more taxpayers
The Obama administration, while promising a new sense of honesty to the budget process, has underestimated the size of the nation's deficit from his new programs by an astounding $2.3 trillion.
The non-partisan Congressional Budget Office said Friday that the administration was a tad too optimistic in its projections on economic growth and the resulting rising revenues.
The New York Times reported:
WASHINGTON — The Congressional Budget Office placed a new hurdle in front of President Obama’s agenda on Friday, calculating that the White House’s tax and spending plans would create deficits totaling $2.3 trillion more than the president’s budget projected for the next decade.
Senator Kent Conrad said the budget office analysis confirmed the need for adjustments.
The difference largely reflects the administration’s more optimistic forecasts of economic growth through 2019.
The budget office figures, which will guide Congress as it takes up Mr. Obama’s proposals in earnest next week, were worse than Democratic leaders expected and further complicated their job of achieving the president’s priorities on health care, energy policy and much more.
Moderate Democrats from competitive districts and states have already expressed nervousness about some of Mr. Obama’s plans, especially as Republicans have grown increasingly emboldened to stay on the attack.
Senator Judd Gregg of New Hampshire, the senior Republican on the Senate Budget Committee, said the new report “confirms that under the president’s plan, our debt will increase to shocking levels that are simply unsustainable and will devastate future economic opportunities for our children and grandchildren.”
The political reality here is that Obama is going to have to sacrifice one of his three, top agenda items. Look for it to be health care, as discussions there between the political parties have already turned quite nasty.
That's a shame. Because health care reform really can produce long-term savings.