Today the Congressional Budget Office reported that the big spenders in Washington have more than tripled our national deficit from $467 billion to $1.6 trillion.
The spending spree we’ve witnessed so far this year is largely responsible for these numbers, but I’m not just blaming Democrats for this one. Some of our “Republican” brethren have contributed to this fiasco and allowed it to happen. Regardless of blame, we just can’t succeed this way. You and I both know what debt really means. It means that someone else owns you. It means that you have lost your freedoms. We have to stand up and fight back against this irresponsible spending spree. We must shake up Congress with some small town common sense.
The article is below or simply click here to read it.
Have a great afternoon.
White House Sharply Increases Deficit Projection to $1.6 Trillion
The federal deficit will soar to nearly $1.6 trillion this year, miring the nation in the deepest pool of red ink since the end of World War II, the nonpartisan Congressional Budget Office and the White House reported Tuesday.
The gap between spending and tax collections will amount to 11.2 percent of the overall economy, more than tripling last year’s deficit of $459 billion, the CBO said. The yawning gap is almost entirely the result of the severe economic downturn, the CBO said, which produced the sharpest drop in tax collections since the Great Depression and the biggest increase in spending since the Korean War.
On the bright side, the deficit is now expected to be slightly lower than officials had feared earlier this year, thanks to dramatically reduced spending on the bailout of the nation’s financial institutions that was approved by Congress in October. The Troubled Asset Relief Program cost only $133 billion this year, the CBO said — about $200 billion less than expected in March.
Both the White House and the CBO said the recession should end within a few months, and the CBO credited a $787 billion stimulus package President Obama signed in February with hastening the economic rebound. But congressional economists are predicting “a relatively slow and tentative recovery,” and Christina Romer, chairman of the president’s Council of Economic Advisers, acknowledged that the unemployment rate is likely to hit 10 percent later this year and remain there through the first months of 2010.
The continuing pain among workers, combined with the massive budget deficit, is likely to complicate Obama’s ambitious legislative agenda when Congress returns to Washington in September. In town hall meetings across the nation this month, voters have complained bitterly about rising federal spending, as well as their fear of greater government intrusion in their lives.
Though the deficit figures are actually a bit better than expected, Republicans leapt upon the ugly numbers Tuesday, arguing that a nation so deeply in hock can’t afford to a sweeping expansion of health coverage for the uninsured, Obama’s top domestic priority.
“Americans are deeply shaken — and increasingly angered — by the explosion of spending and debt coming from Washington,” said Rep. Paul Ryan (R-Wisc.), the senior Republican on the House Budget Committee. “If we continue to pursue this policy of Washington as the answer to every problem, it will cost Americans far more than the obvious burdens of ever-higher taxes, interest rates, inflation, and debt; it will cost us the freedom to run our own lives.”
Added Rep. Dave Camp (R-Mich.), the senior Republican on the House Ways and Means Committee: “If the House Democrats’ unaffordable $1 trillion health care bill wasn’t dead before, it should be now.”
White House budget director Peter Orszag defended the president’s health care initiative, saying reform is essential to reining in the skyrocketing costs of Medicare and Medicaid, the government health programs that threaten to drive future deficits even higher.
“I know some will say this report proves we can’t afford health reform. I think that analysis has it backwards,” Orszag said. “Given the long-term nature of that problem, we simply can’t afford to wait.”
Orszag said that the administration of Obama’s Republican predecessor, George W. Bush, deserves much of the blame for the dark budget picture. More than half of the $9 trillion the nation is projected to have to borrow over the next decade is due to Bush’s refusal to pay for new initiatives, such as sweeping tax cuts, the war in Iraq and a new prescription drug benefit for Medicare recipients, Orzag said.
As president, Obama has called for maintaining some of the Bush policies that have fueled the deficit– he would extend some of the Bush tax cuts beyond their 2010 expiration date, for example. But in light of the new deficit figures, Orszag hinted — without offering details — that Obama may revisit some of those decisions when he submits his next budget in February.
“Whatever their cause, the administration is very concerned about those out-year deficit figures,” Orszag said, “and getting those deficits under control is a top priority of this administration.”
The White House now projects that the economy will shrink by 2.8 percent this year, grow by a sluggish 2.0 percent next year and heat up to 3.8 percent growth in 2011. Romer predicted an average unemployment rate of 9.8 percent next year.
As a result, government spending on social programs will continue to soar while tax collections will lag behind expectations. And deficits are likely to remain elevated even after the economy recovers, averaging more than $800 billion a year through 2019, when the White House forecasts the annual gap between spending and revenue will be $917 billion.
All told, the White House predicts that the nation will have to borrow an additional $9 trillion over the next decade to finance the annual deficits, driving the accumulated national debt to nearly $23 trillion in 2019 — or 76.5 percent of gross domestic product, the highest since 1950.
Despite the grim outlook, Orszag and Romer insisted that the stimulus package is working and said the nation’s economy would be in far worse shape without it, an opinion shared by many outside analysts.