rssCBO Projects $1.8 Trillion Deficit; Orszag Responds
Friday, March 20, 2009 at 2:37 pm
- 7 Comments
The Congressional Budget Office has conducted an analysis of President Obama’s budget proposal and now projects a $1.8 trillion deficit this year, up from a $1.2 trillion projection in January.
“As estimated by CBO and the Joint Committee on Taxation, the President’s proposals would add $4.8 trillion to the baseline deficits over the 2010–2019 period,” CBO Director Douglas Elmendorf wrote on his blog this afternoon. “CBO projects that if those proposals were enacted, the deficit would total $1.8 trillion (13 percent of GDP) in 2009 and $1.4 trillion (10 percent of GDP) in 2010.”
On a conference call just now with reporters, Office of Management and Budget Director Peter Orszag explained how the higher projected shortfall came about.
“As expected, it reflected a worsening of both the economic and fiscal picture since the CBO’s January report,” Orszag said. “I think one thing that’s often underappreciated is how sensitive the budget is to small changes in assumptions.”
As a hypothetical example, he said, if initial projections had spending at $1,050 and revenue at $1,00, and then revenue decreased 10 percent, the deficit would rise from $50 to $150 — a 200 percent increase.
But he insisted that the new projections will have no impact on the administration’s commitment to its four top priorities in the budget: health care, education, clean energy and cutting the deficit in half by the end of Obama’s first term.
Asked about the possibility of using the controversial budget reconciliation process to circumvent a possible GOP filibuster of cap-and-trade legislation, Orszag said, “With regard to reconciliation, I’ll again say, it’s not where we want to start, but it would be premature to take it off the table.”
The budget will now head to Congress, where Orszag anticipates there will be significant adjustments.
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7 Comments
Comment posted March 20, 2009 @ 2:14 pm
Obamanomics : Let's do the math. The FED prints One Trillion Dollars to buy debt from the Treasury, the CBO projects Obama's 2009 budget deficit at Two Trillion Dollars. So we add THREE TRILLION DOLLARS to the deficit in 2009!!!!
SOMEONE, please explain how thisis good for me
Comment posted March 20, 2009 @ 2:29 pm
Obama is drowning us in an Ocean of debt. The Chinese can't possible loan us all of that. If Obama and the Federal Reserve keep printing money monopoly money will be worth more than dollars in a cfew years. Obama needs to get real before he completely destroys our economy and drives unemployment to Great Depression levels!
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Comment posted March 20, 2009 @ 8:41 pm
Is Orszag as delusional as his boss? Is this what happens when you agree to work for the Deal Leader? I hope moderate Democrats learn a long hard lesson here. You'll never make any headway with the loons on the fringes, but there are a lot of reasonable people out there, and they've got to be looking at this and saying “what have we done?”
Comment posted March 20, 2009 @ 9:14 pm
Obamanomics : Let's do the math. The FED prints One Trillion Dollars to buy debt from the Treasury, the CBO projects Obama's 2009 budget deficit at Two Trillion Dollars. So we add THREE TRILLION DOLLARS to the deficit in 2009!!!!
SOMEONE, please explain how thisis good for me
Comment posted March 20, 2009 @ 9:29 pm
Obama is drowning us in an Ocean of debt. The Chinese can't possible loan us all of that. If Obama and the Federal Reserve keep printing money monopoly money will be worth more than dollars in a cfew years. Obama needs to get real before he completely destroys our economy and drives unemployment to Great Depression levels!
Comment posted March 21, 2009 @ 3:41 am
Is Orszag as delusional as his boss? Is this what happens when you agree to work for the Deal Leader? I hope moderate Democrats learn a long hard lesson here. You'll never make any headway with the loons on the fringes, but there are a lot of reasonable people out there, and they've got to be looking at this and saying “what have we done?”
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