Date published: August 16, 2010
Journal code: NEAM
President Obama has drastically increased his forecasts for budget deficits over the next two years, reported the Washington Post for July 23. "The latest forecast from the White House budget office shows the deficit rising to $ 1 .47 trillion this year, forcing the government to borrow 4 1 cents of every dollar it spends. Contrary to official projections, the budget gap will not begin to narrow much in 201 1, because of an unexpectedly big drop in tax receipts." The predicted deficit for 201 1 will be $ 1 .42 trillion.
By comparison, Obama's first budget, back in February of 2009, promised much smaller deficits of $ 1 . 1 7 1 trillion this y ear and $9 1 2 billion in 201 1. The new figures therefore represent an increase in the deficit of more than $800 billion over two years since Obama's first budget proposal that included a $787 billion "stimulus" bailout bill. Obama's first budget, released with the ironic title "A New Era of Responsibility," included a message from the President promising that these were accurate estimates for upcoming deficits: "It looks ahead a full 10 years, making good-faith estimates about what costs we would incur; and it accounts for items that under the old rules could have been left out, making it appear that we had billions more to spend than we really do."
Republican leaders were quick to pounce upon the upwardly revised deficit numbers released by the Obama administration. House Republican Conference Chairman Mike Pence blasted out in a press release: "The message of today's report is unambiguous: Washington desperately needs real leadership. We cannot continue to postpone the hard choices and sacrifices that are necessary to stop this fiscal train wreck."
But will the Republicans offer that "real leadership" that is needed? That's unlikely. The House Republican alternative budget proposal, not updated since April 2009, still calls for $500 billion-plus annual deficits into the indefinite future. If the Republican leadership had truly put a priority on bringing the budget into balance, their budget proposal would have been updated and included specific spending cut proposals. Neither has been done.