Economy Alarm: CBO Rings the Alarm on the Democrats’ Runaway Spending Spree

Democrats Once Promised to Restore Fiscal Discipline and Tame Exploding Deficits

“With the recovery package, we not only created jobs – about 2 million saved or created with more being rolled out – but pulled us back from the brink of even deeper recession. In his [President Obama’s] budget, which we passed one hundred days after his swearing-in, he had a blueprint for how we go into the future, create jobs, stabilize the economy [and] do so as we reduce the deficit – [it’s] very central to everything we do – reduce the deficit.” (Matt Cover, “Pelosi Says Jobs ‘Permeated’ Congressional Actions in Year of 10 Percent Unemployment,” CNSnews.com, 1/25/2010)

“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.’” (“Obama: Stimulus lets Americans claim destiny,” Associated Press, 2/17/2009)

Credibility Crash: National Debt Continues to Reach New Heights as Democrats Refuse to Stop Their Spending Spree

The national debt will reach 62 percent of gross domestic product (GDP) by the end of this year, the nonpartisan Congressional Budget Office (CBO) said Wednesday.

The budget office said the debt will reach its highest percentage of GDP since the end of World War II. The jump is driven by lower tax revenues and higher federal spending in the recent recession.

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By contrast, GDP has averaged “a little above” 36 percent per year over the past 40 years.

The report comes as President Barack Obama’s fiscal commission meets again on Wednesday to work on crafting solutions to reining in deficits and the debt over time.

Obama got somewhat of a chilly reception from world leaders at the G-20 summit over the past weekend when he pressed them to continue with spending to bolster the global economy. Many nations in Europe and elsewhere have had to grapple with their own debt crises, and have been forced to enact tough austerity measures.

Republicans have been hammering away at the president and Democrats in Congress for their spending over the past year and a half, arguing that the stimulus act, healthcare reform law and other measures have done little more than exacerbate the nation’s fiscal situation.

But the bigger long-term problem, according to CBO, remains Medicare.

CBO Director Douglas Elmendorf wrote in a blog post explaining the new report that under current laws, “federal spending on major mandatory healthcare programs will grow from roughly 5 percent of GDP today to about 10 percent in 2035 and will continue to increase thereafter.”

Keeping current policies in place would almost certainly force lawmakers to make steep spending cuts and raise taxes, Elmendorf argued, unless changes to address the problems were made sooner rather than later. (Michael O’Brien, “CBO says debt will reach 62 percent of GDP by year’s end,” The Hill, 6/30/2010)

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