President Barack Obama stands with House Speaker Paul Ryan of Wis. in Emancipation Hall on Capitol Hill in Washington, Wednesday, Dec. 9, 2015, during an event to celebrate the 150th anniversary of the 13th amendment that abolished slavery. (Photo: AP)
The Congressional Budget Office on Tuesday released their revised budget projections that show the federal deficit ballooning as a result of the Obama-Ryan compromise.
“If current laws generally remained unchanged, the deficit would grow over the next 10 years, and by 2026 it would be considerably larger than its average over the past 50 years,” the CBO projected. “Debt held by the public would also grow significantly from its already high level.”
The CBO report said the deficit will hit $544 billion in fiscal year 2016, which represents a staggering 24% increase over the prior year. It’s also represents a far cry from what the analysts had projected and promised in August, when they told Congress deficits would continue to fall on the margins.
However, when looking the data in a little deeper depth, the numbers are actually more grim, considering base-line budgeting and a number of misleading assumptions. President Obama has long repeated the claim that he kept his campaign promise to cut the federal deficit in half, but that has always been a gimmick. In June 2015, the CBO issued a dire warning that the “outlook for the federal budget has worsened dramatically over the past several years.”
The CBO data make clear that the deficits under President Obama—which he claims to have cut so dramatically—were little more than a budgetary tactic designed to run out the clock on his tenure. Within a few years, largely due to rising health care costs, ObamaCare, and an aging population promised the benefits of Medicare and Social Security, deficits as a percentage of gross domestic product (GDP) will explode.
And that was before the Obama-Ryan budget dismissed the spending restraints put in place by the Budget Control Act. Now, federal spending will jump by 6% in 2016 to $3.9 trillion, or 21.2% of the country’s entire economic output as measured by gross domestic product (GDP). Meanwhile, the government will collect just $3.4 trillion in taxes, or 18.3% of GDP.
Barring a change in policy direction, those dangerous trends will continue over the next decade. Taxes, or revenues, as some have taken to saying, will will remain about 18% of GDP, while spending will rise from 21% to 23%. With the total U.S. national debate currently just under $19 trillion, the next president will have to decide how to handle the coming debt crisis.
Richard D. Baris / January 19, 2016
Nice, just lovely.
/