Economy Alarm: Dems’ Summer Budget Buster: “Exploding Deficits and Mounting Debt” Over the Next Decade

Dems’ Summer Budget Buster: “Exploding Deficits and Mounting Debt” Over the Next Decade
White House Announces Budget Deficit Will Be $2 Trillion Higher Than Predicted Months Ago

Obama Promised He Was On Track to Boost the Federal Debt, Revive the Economy, and Save Millions of Jobs

“Obama focused on the $787 billion stimulus plan, an ambitious package of federal spending and tax cuts designed to revive the economy and save millions of jobs…. The stimulus package was a huge victory for Obama less than one month into his presidency. Still, he declared, ‘We have begun the essential work of keeping the American dream alive in our time.’… The only thing certain is that Obama is on track to boost a federal debt that stands at $10.7 trillion. Clearly mindful of that, Obama said: ‘We will need to do everything in the short term to get our economy moving again’ as well as ‘begin restoring fiscal discipline and taming our exploding deficits over the long term.’” (The Associated Press, “Obama: Stimulus lets Americans claim destiny,” 02/17/2009)

Credibility Crash: Figures Released by the White House Budget Office Foresee a $9 Trillion Deficit in the Next Decade, $2 Trillion Higher Than Predicted

The federal government faces exploding deficits and mounting debt over the next decade, White House officials predicted Tuesday in a fiscal assessment far bleaker than what the Obama administration had estimated just a few months ago.

Figures released by the White House budget office foresee a cumulative $9 trillion deficit from 2010-2019, $2 trillion more than the administration estimated in May. Moreover, the figures show the public debt doubling by 2019 and reaching three-quarters the size of the entire national economy.

Obama economic adviser Christina Romer predicted unemployment could reach 10 percent this year and begin a slow decline next year. Still, she said, the average unemployment will be 9.3 in 2009 and 9.8 percent in 2010.

“This recession was simply worse than the information that we and other forecasters had back in last fall and early this winter,” Romer said.

The grim administration projections came on a day of competing economic news. The Congressional Budget Office, which has predicted less economic growth than the White House in the past, was also scheduled to announce revised budget projections on Tuesday.

Obama himself may have drowned out the rising deficit news with the announcement Tuesday that he intends to nominate Ben Bernanke to a second term as chairman of the Federal Reserve. The Bernanke news could neutralize any disturbance in the financial markets caused by the high deficit projections.

The deeper red ink and the gloomy unemployment forecast present President Barack Obama with an enormous challenge. The new numbers come as he prods Congress to enact a major overhaul of the health care system — one that could cost $1 trillion or more over 10 years. Obama has said he doesn’t want the measure to add to the deficit, but lawmakers have been unable to agree on revenues that cover the cost. (Jim Kuhnhenn, “White House Projects Bigger Deficits, Bigger Debt,” The Associated Press, 08/25/2009)

To read the full article, click here: http://abcnews.go.com/Politics/wireStory?id=8407055

###