Research Briefing

The CBO Budget Outlook Forecasts That Obama’s Promise To Cut The Deficit In Half Will Go Unfulfilled

PROMISE: OBAMA WILL CUT DEFICIT TO $533 BILLION BY END OF FIRST TERM
DOUBLE FAIL: DEFICIT AT END OF FIRST TERM WILL BE $1.079 TRILLION

PROMISE: Obama Pledged To Cut The Deficit In Half By The End Of His First Term. OBAMA: “And that's why today I'm pledging to cut the deficit we inherited by half by the end of my first term in office.” (President Barack Obama, Remarks At The Fiscal Responsibility Summit, Washington, D.C., 2/23/09)

• “President Barack Obama Plans To Cut The U.S. Budget Deficit To $533 Billion By The End Of His First Term …” (Hans Nichols, “Obama Plans To Reduce Budget Deficit To $533 Billion By 2013,” Bloomberg, 2/21/09)
• One White House Official Told Politico “We’ll Cut It At Least In Half.” “Under White House projections, this year’s inherited budget deficit of $1.3 trillion will be cut to $533 billion by fiscal year 2013, the end of the first term. ‘So we’ll cut it at least in half,’ the official said.” (Mike Allen, “Obama Vows To Cut Huge Deficit In Half,” Politico, 2/22/09)

FAIL: The CBO Projects The Deficit At The End Of Obama’s First Term Will Be $1.079 Trillion, Obama’s Fourth Straight Trillion Dollar Deficit. (“The Budget And Economic Outlook: Fiscal Years 2012-2022,” Congressional Budget Office, 1/31/12; “Monthly Budget Review: November 2011,” Congressional Budget Office, 11/7/11)

• “If The CBO Estimate Is Correct, It Would Mean That The United States Recorded A Deficit Of More Than $1 Trillion For Every Year Of Obama’s First Term.” (Erik Wasson, “CBO Projects $1.08T Deficit, Higher Unemployment,” The Hill’s “On The Money,” 1/31/12)

• Even If Every Part Of Obama’s Deficit Reduction Proposal Was Enacted, The Deficit At The End Of His First Term Would Be Even Higher, $1.33 Trillion. (“The President’s Plan For Economic Growth And Deficit Reduction; Table S-3,” Office Of Management And Budget, 9/19/11)

• Politifact: “Obama Made A Pledge To Cut The Deficit In Half By The End Of His First Term. And He’s Falling Short So Far.” (Gregory Trotter, “Tim Pawlenty Says President Obama Is Going To Break Promise On Deficit And Will Double It,” Politifact, 6/10/11)

Obama Has Amassed Three Of The Largest Deficits In History And Is On Track For A Fourth

President Obama Has Racked Up The Three Largest Deficits In U.S. History. “The U.S budget deficit for fiscal year 2011 is $1.299 trillion, the second largest shortfall in history. The nation only ran a larger deficit for the 2009 fiscal year, which included the dramatic collapse of financial markets and a huge bailout effort by the government.”(Erik Wasson, “Treasury Announces 2011 Deficit Is Second Highest In History,” The Hill’s On The Money, 10/14/11)

• FY2009: The Federal Budget Deficit Was $1.413 Trillion, The Highest In U.S. History. (“Monthly Budget Review: November 2011,” Congressional Budget Office, 11/7/11)
• FY2011: The Federal Budget Deficit Was $1.299 Trillion, The Second Highest In U.S. History. (“Monthly Budget Review: November 2011,” Congressional Budget Office, 11/7/11)
  
• FY2010: The Federal Budget Deficit Was $1.294 Trillion, The Third Highest In U.S. History. (“Monthly Budget Review: November 2011,” Congressional Budget Office, 11/7/11)

The Projected Deficit Is “Still Higher Than Any Deficit Between 1947 And 2008.” “As a percentage of the overall economy, the projected deficit of 7% is ‘nearly 2 percentage points below the deficit recorded in 2011, but still higher than any deficit between 1947 and 2008,’ the report says.” (David Jackson, “CBO: $1.1T Deficit, At Least 8% Jobless Rate This Year,” USA Today’s “The Oval,” 1/31/12)

OBAMA HAS FAILED TO LEAD AND BROKEN HIS PROMISE TO CONFRONT AMERICA’S FISCAL CHALLENGES

WORDS: Obama Said He Was Not Going To “Punt To Future Administrations The Tough Choices” Necessary To Get Control Of Our Debt And Deficits. OBAMA: “And so what I've said is, I'm going to be willing to make some very difficult choices in how we get a handle on this deficit. That's what the American people are looking for. And, you know, what we intend to do this year, next year, and all the years that I'm in office is to demonstrate our seriousness, not by gimmicks, not by punting to future administrations the tough choices, but by making some of those tough choices while I'm in office.” (President-Elect Barack Obama, Informal Exchange With Reporters On The Economy And Budget, Washington, D.C., 1/6/09)

FACTS: The CBO Predicts That This Year The Federal Debt Will Reach $16.002 Trillion, Meaning Obama Will Have Added More To The Debt Than Any Other President. (“The Budget And Economic Outlook: Fiscal Years 2012-2022,” Congressional Budget Office, 1/31/12 ; “Debt To The Penny,” TreasuryDirect.gov, Accessed 1/31/12)

• CBO Report Could Have Been Called: “It’s Not Just The Economy Stupid, It’s Also The Debt.” “Like Aunt Cassandra coming down from the attic, the Congressional Budget Office steps square into the 2012 campaign season with the 147-page report which might have been subtitled ‘It’s not just the economy stupid, it’s also the debt.’” (David Rogers, “Congressional Budget Office Reports Another $1 Trillion Deficit,” Politico, 1/31/12)
• “The Report Is Yet Another Reminder Of The Perilous Fiscal Situation The Government Is In.” “The report is yet another reminder of the perilous fiscal situation the government is in, but it’s commonly assumed that President Barack Obama and lawmakers in Congress that little will be accomplished on the deficit issue during an election year.” (“Congressional Budget Office Estimates Federal Budget Deficit To Dip Slightly To $1.1T,” The Associated Press, 1/31/12)

CBO: Federal Debt Will Grow 47 Percent By 2022 To A Total Of $21.7 Trillion. “Gross federal debt consists of debt held by the public and debt issued to government accounts. In CBO’s projections, debt held by the public is expected to increase by more than 50 percent between the end of 2011 and the end of 2022, and debt held by government accounts is expected to rise by nearly 40 percent. As a result, gross federal debt is projected to climb in every year from 2012 to 2022, reaching $21.7 trillion in 2022—47 percent more than its total of $14.8 trillion at the end of 2011.” (“The Budget And Economic Outlook: Fiscal Years 2012-2022,” Congressional Budget Office, 1/31/12)

• CBO: Government Spending Will Remain “Elevated By Historical Standards.” “Projected spending averages 21.9 percent of GDP over the 2013–2022 period, a percentage that is less than the 23.2 percent CBO estimates for 2012 but that is still elevated by historical standards.” (“The Budget And Economic Outlook: Fiscal Years 2012-2022,” Congressional Budget Office, 1/31/12)

CBO: The Aging Population And Rising Health Care Costs “Will Increase Federal Debt To Unsupportable Levels.” “Under both CBO’s baseline and its alternative fiscal scenario, the aging of the population and rising costs for health care will push spending for Social Security, Medicare, Medicaid, and other federal health care programs considerably higher as a percentage of GDP. If that rising level of spending is coupled with revenues that are held close to the average share of GDP that they have represented for the past 40 years (rather than being allowed to increase, as under current law), the resulting deficits will increase federal debt to unsupportable levels.” (The Budget And Economic Outlook: Fiscal Years 2012 To 2022, Congressional Budget Office, 1/31/12)