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  • CBO Report Confirms: Obama’s Budget Laden with Debt

    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.

    The CBO’s analysis highlights the minimalist policy proposals that the President offered in his budget (pdf) to reduce the deficit and contain federal spending. For example, his policies of first pushing spending up dramatically and now a freeze on the domestic, non-security discretionary part of the budget still leaves spending out of control. Other proposals, such as simply reclassifying transportation spending as mandatory spending, amount to just another round of budgetary musical chairs.

    The most egregious part of the Obama budget is not what is included but what is missing: concrete policy proposals to reform Social Security, Medicare, and Medicaid. These mandatory programs are the main drivers of federal spending and the budget deficit; the CBO analysis finds that by 2021 entitlement spending will account for 60 percent of total spending. Failure to implement entitlement reform compromises the economic future of the country and would leave an unacceptable tax burden that families and businesses must bear.

    The CBO report shows the expected damage that the President’s budget would cause to the nation’s fiscal house. Running contrary to the President’s vision for “Winning the Future” through tax-borrow-and-spend policies is the certainty that greater government spending will lead to ever-higher taxes, massive deficits, and a lower standard of living for future generations of Americans.

    Again, it is made plain that the President chooses to ignore the recommendations (pdf) of his own bipartisan fiscal commission, which called for prompt and serious reform of entitlement programs. Curtailing domestic discretionary spending back to pre-recession levels is only part of the equation to put the nation on sound financial footing. The nation is looking to the President for leadership—not only on real spending cuts but on the hard work of entitlement reform.

    Posted in Economics [slideshow_deploy]

    8 Responses to CBO Report Confirms: Obama’s Budget Laden with Debt

    1. Stirling, Pennsylvan says:

      If people don't realize that this administration could be purposely driving the country into the ground financially by now, then they have chosen to overlook the Fox-Piven collaspsing the system theory. Incidentally it was tried in New York some time ago and almost succeeded. Change is NOT always a good thing unless you know what "Change" will look like in the end.

    2. Leon Lundquist, Dura says:

      Oh! Emily I am so blue! The Consumers pay for everything! Everybody passes down their Costs to the regular folks. And we pay it! I am so sick of the Democrats pretending to help the poor! How can these Sorcerers go on being the opposite of what the pretend! You are so right! The hammer always falls hardest on the poor, common sense because proportionally they have less Income! All these taxes find their way down to the millions. The Economy these days we had better keep the Rich People on the roles of Social Security, don't you know! The Progressives absolutely Hate rich people! It is a murderous hatred, so at any moment the Rich People may need a Social Security check. Obama plans to destroy them all!

      Somebody tell the Democrats "You idiots! The Cold War Communists usurped your whole Political Party!" That is damage that doesn't score at all at the CBO! What makes me crazy is Junk Science in Medicine and how Americans get less and less actual care for ever increasing costs! I'm old, I remember when Medicine was Strict Cures and less about Managing Disease forever at super high cost! To ask the Health Food Industry and they'll say Medicine ignores Cures so they can Manage Care for obscene profits. Look for the money? Well! The Government-Pharma-Trial Lawyers-Industrial Complex gets it! The Doctors don't even get paid!

      The little guys pay for unreadable quantities of Regulations and Make Work. It really isn't the rising cost of Medicine, it is the soaring cost of Junk!

    3. Pingback: CBO Report Confirms: Obama’s Budget Laden with Debt | Big Propaganda

    4. Concerned, Mequon WI says:

      Obama was a huge mistake and people are now realizing it. He wants to play not work. He will take advantage of his presidency and spend as much of the people's money on his own personal agenda as he can.

    5. Lloyd Scallan (New O says:

      Obama is not "ignoring"! He instralled this commission as yet another ploy to

      deceive the American people into thinking he is honestly trying to save our economy. How much more do we need to realize Obama is delibertly attempting

      to collapse our capitalist system, with distortions of facts so he can replace it with socialism.

    6. Tom Sullivan in FL says:

      Sorry, but the increase in national debt will be about $2 trillion, not the rosy $1.43 trillion "deficit".

      Virtually everyone, including Heritage Foundation and Cato Institute, has stopped counting the massive embezzlement of federal trust funds (such as social security) as part of the annual "deficit". For example, in FY 2009 the "deficit" was widely reported as $1.43 trillion; the increase in the national debt was $1.88 trillion. In FY 2010 the figures are $1.3 trillion and $1.65 trillion.

      Things are far worse than the "news media" and even conservatives are telling us. This delusion will only hasten the demise of the United States.

    7. Paula Q - Hartland W says:

      November 2010 was only a beginning. We MUST elect individuals that will tell us the truth and do the hard work of actually fixing these entitlement problems. I have been having the discussion about Social Security and Medicare/Medicaid with my Dad for years! Everyone knows that this system is unsustainable! Our current politicians are reluctant to touch the "third rail" issues – time to vote them out and put in people who will look at their tenure in Government as an opportunity to correct our junkie attitude towards uncontrolled spending, put us on a real road to fiscal responsibility and most importantly – temporary!

      I am sick to death of both sides of the isle trying to position the argument so the opposing side will be blamed for the tough outcome. As Obama himself said, time for grown up discussions and grown up solutions. We should all be ashamed of ourselves if we shrink back from this task and leave our children a nation in decline.

    8. John Adams says:

      What's I'd like to know is how shrinking the economy by $400B-$600B when we're trying to grow the economy out of recession will work. It seems like asking a lot to expect business to expand because of tax breaks when more workers are being laid off and programs are being shut down. Even if a business wants to expand, how likely is it banks will loan them money?

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