posted 08-24-2011 02:15 PM                  

The government will run another $1.3 trillion deficit in fiscal year 2011, Congress‘ chief scorekeeper said Wednesday — easily eclipsing the $917 billion in savings over the next decade lawmakers scratched out earlier this month in their debt deal, and underscoring the deep challenge they face going forward.

It marks the third-largest shortfall in history, and the third straight $1 trillion deficit under President Obama, though next year’s deficit is projected to dip just under that mark according to the Congressional Budget Office.

Over the next decade, the federal government will rack up nearly $6 trillion in new deficits, the CBO said — far outstripping the $1.5 trillion in future savings the new deficit super committee is charged with recommending to Congress.

Still, the annual summertime budget update showed the progress Congress has achieved already since January: The projected deficit is $200 billion lower this year, and the long-term debt trend has been bent downward over the next decade and could actually be lower as a percentage of the economy in 2021 than it is today.

Unemployment, though, will remain higher than average for years, including a rate of 8.5 percent in the final quarter of 2012, just as Mr. Obama and Congress go back to face voters.

“A slight decrease in the projected deficit is nothing to celebrate, particularly when it is accompanied by the grim news that CBO expects the national unemployment rate to continue to exceed 8 percent well past next year,” said House Speaker John A. Boehner, Ohio Republican. “The president’s policies were supposed to keep that from happening. Instead they’ve added trillions to our debt at the expense of our children and helped put our nation’s credit rating in jeopardy.”

Those on the new 12-member deficit super committee said they know they have their work cut out for them.

“The CBO outlook underscores the need for the joint committee to propose a plan to help put America back to work, coupled with a blueprint to reduce the long term deficit,” said Rep. Chris Van Hollen, ranking Democrat on the House Budget Committee, who is one of six Democrats on the panel.

Mr. Van Hollen said that deal must include tax increases, with the new revenue used to lower future deficits. Republicans are vowing to fight tax hikes, pushing instead to streamline tax rates and rely on better economic growth to boost revenues.

But that growth appears to be iffy. In blunt language, the 110-page CBO report said the economy “remains in a severe slump” and projected its effects will continue to be felt throughout the next decade, so that even by 2012 the rebound will not have offset losses early in the recession.

And the nagency said that if laws aren’t rewritten, the economy will suffer another bump in two years.

“Under current law, federal tax and spending policies will impose substantial restraint on the economy in 2013, so CBO projects that economic growth will slow that year before picking up again,” the CBO said in the annual budget update it releases every August.

That would mean real GDP growth of just 1.7 percent in calendar year 2013, according to the report.

On the other side of the equation, interest rates would remain low through 2013 before increasing to normal levels in the later years of the decade, the agency said.

This year’s deficit numbers were actually helped by higher-than-expected income tax revenues, which the CBO said are likely to continue through 2012 but then fade quickly thereafter.

In 2011, revenue will hit $2.3 trillion, while spending, measured by outlays, will be $3.6 trillion.

CBO’s report contains a number of other judgements on the economy, government programs and Congress‘ actions this year:

• After the current fiscal year, Social Security costs have ticked up slightly, while Medicare and other health spending will slide a bit.

• Despite claims of larger savings, the one-year spending deal Congress reached with President Obama in April to avert a government shutdown did not have a large effect on 2011 spending. The largest change, the CBO said, came from lower defense spending because the deal was reached halfway through the fiscal year, which pushed some purchases into next year.

posted 08-24-2011 02:16 PM                  

Obama: The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents - #43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back -- $30,000 for every man, woman and child. That's irresponsible. It's unpatriotic. (July 3, 2008)
http://www.realclearpolitics.com/video/2011/08/24/flashback_oba ma_adding_4_trillion_to_debt_is_unpatriotic.html

So what does that make OBAMA?

posted 08-24-2011 02:23 PM                  

The deficit for THIS year is already over $ 1 Trillion.
This is the third year in a row it has gone over a Trillion.
The record is $ 1.41 Trillion in 2009.
Last year it was $ 1.29 Trillion.
PRIOR TO 2009 it NEVER CAME CLOSE to a Trillion dollars.

This guy promised change and delivered.

posted 08-24-2011 04:06 PM                  

Cut $900 billion,,,,Spend $1.3 trillion....

Looks to me like BHO's shell game of Chicago politics!