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CBO Roundup: The Road Ahead Gets Darker

RNC Communications - January 31, 2012

“The Pace Of Recovery In Output And Employment Has Been Slow Since The Recession Ended In June 2009, And The Economy Remains In A Severe Slump.” (“The Budget And Economic Outlook: Fiscal Years 2012-2022,” Congressional Budget Office, 1/31/12)

The Congressional Budget Office Downgrades Obamanomics In Its 2012 Budget And Economic Outlook

CBO: “The Economy Will Continue To Grow At A Sluggish Pace Over The Next Two Years.” “The pace of the economic recovery has been slow since the recession ended in June 2009, and the Congressional Budget Office (CBO) expects that, under current laws governing taxes and spending, the economy will continue to grow at a sluggish pace over the next two years. That pace of growth partly reflects the dampening effect on economic activity from the higher tax rates and curbs on spending scheduled to occur this year and especially next.” (“The Budget And Economic Outlook: Fiscal Years 2012-2022,” Congressional Budget Office, 1/31/12)

  • CBO: “Considerable Slack Remains In The Labor Market” And Unemployment Will Remain Above 8 Percent This Year And Next. “Considerable slack remains in the labor market, mainly as a consequence of continued weakness in demand for goods and services. In CBO’s forecast, the unemployment rate remains above 8 percent both this year and next.” (“The Budget And Economic Outlook: Fiscal Years 2012-2022,” Congressional Budget Office, 1/31/12)

CBO Report Shows “Little Relief In The Future.” “The government faces a fourth year of trillion-plus deficits in 2012, according to new projections released Tuesday—numbers which also show little relief in the future unless Washington comes to grips with needed changes in its tax and spending policies.” (David Rogers, “Congressional Budget Office Reports Another $1 Trillion Deficit,” Politico, 1/31/12)

  • CBO: The Economy Will Remain Below Its Potential Output Until 2018. “Although CBO projects that growth will pick up after 2013, the agency expects that the economy’s output will remain below its potential until 2018 and that the unemployment rate will remain above 7 percent until 2015.” (“The Budget And Economic Outlook: Fiscal Years 2012-2022,” Congressional Budget Office, 1/31/12)

CBO Predicts A $1.08 Trillion Deficit In 2012 And Jobless Rate Rising To 9.2 Percent In 2013.  “The Congressional Budget Office on Tuesday predicted the budget deficit will rise to $1.08 trillion in 2012. CBO also projected the jobless rate would rise to 8.9 percent by the end of 2012, and to 9.2 percent in 2013.” (Erik Wasson, “CBO Projects $1.08T Deficit, Higher Unemployment,” The Hill’s “On The Money,” 1/31/12)

  • “These Are Much Dimmer Forecasts Than In CBO's Last Report In August.” “These are much dimmer forecasts than in CBO's last report in August, when the office projected a $973 billion deficit. The report reflects weaker corporate tax revenue and the extension for two months of the payroll tax holiday.” (Erik Wasson, “CBO Projects $1.08T Deficit, Higher Unemployment,” The Hill’s “On The Money,” 1/31/12)

GDP Growth Prediction For 2012 Revised Down To 2 Percent. “Gross domestic product for 2011 is now estimated to have grown 1.6 percent in 2011, down from the 2.3 percent forecast in August. CBO a year ago had predicted 3.1 percent growth for 2011. The outlook for 2012 has also worsened. GDP is forecast to grow only 2 percent this year, compared to a previous estimate of 2.7 percent.” (Erik Wasson, “CBO Projects $1.08T Deficit, Higher Unemployment,” The Hill’s “On The Money,” 1/31/12)

CBO Predicts “Rough Economic Numbers” For Obama’s Re-Election. “The Congressional Budget Office is projecting some rough economic numbers for President Obama this re-election year, but perhaps with some relief in the years ahead.” (David Jackson, “CBO: $1.1T Deficit, At Least 8% Jobless Rate This Year,” USA Today’s “The Oval,” 1/31/12)

  • Jobless Rate At Election Time Will Be Higher Than Those That Contributed To Losses By Carter And Bush. “That jobless rate is higher than the rates that contributed to losses by Presidents Jimmy Carter (7.5 percent) and George H.W. Bush (7.4 percent). The study predicts unemployment to remain above roughly 5 percent — until 2016. The agency also predicts that unemployment will remain at 7 percent or above through 2015” (“Congressional Budget Office Estimates Federal Budget Deficit To Dip Slightly To $1.1T,” The Associated Press, 1/31/12)

CBO Forecasts Predict Growing Federal Debt Will Hamper Economic Growth

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 $1.079 Trillion Deficit Now Projected For This Fiscal Year Ending Sept. 30 Is Actually Worse Than What CBO Had Predicted In August.” (David Rogers, “Congressional Budget Office Reports Another $1 Trillion Deficit,” Politico, 1/31/12)
  • “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)

“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)

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)

ObamaCare Has Failed To Constrain Federal Spending On Health Care

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)

CBO: Spending On Medicare Will Reach $1.8 Trillion In 2022. “In CBO’s baseline projections, spending for health programs more than doubles between 2012 and 2022, rising by an average of nearly 8 percent per year and reaching $1.8 trillion in 2022.” (The Budget And Economic Outlook: Fiscal Years 2012 To 2022,Congressional Budget Office, 1/31/12)

CBO: With ObamaCare, Medicaid Spending Will “Shoot Up Rapidly” Totaling $605 Billion In 2022. “Spending for the program will climb again in 2013 and will shoot up rapidly in 2014, 2015, and 2016 as a result of provisions in the Affordable Care Act. By 2022, under current law, federal outlays for Medicaid are expected to total $605 billion, more than twice the 2012 amount; spending will equal about 2.5 percent of GDP, compared with 1.7 percent this year.” (The Budget And Economic Outlook: Fiscal Years 2012 To 2022, Congressional Budget Office, 1/31/12)

CBO: Enrollment In Medicaid Will Increase Under ObamaCare, Increasing The Federal Share Of Those Expenses. “Enrollment is expected to rise rapidly over the decade as more people become eligible for Medicaid under provisions of the Affordable Care Act and as the number of elderly people rises. By 2022, about 95 million people will be enrolled in Medicaid at some point in the year, CBO estimates. For many of those new enrollees, the federal share of their costs will be significantly larger than the share for individuals enrolled in Medicaid today.” (The Budget And Economic Outlook: Fiscal Years 2012 To 2022, Congressional Budget Office, 1/31/12)

CBO: ObamaCare Mandates Will Increase Mandatory Health Care Spending “From $26 Billion This Year To $161 Billion In 2022.” “Provisions in the Affordable Care Act will significantly increase the scope and scale of such benefits in the coming decade. In CBO’s baseline projections, federal spending for mandatory health care programs other than Medicare and Medicaid rises from $26 billion this year to $161 billion in 2022.” (The Budget And Economic Outlook: Fiscal Years 2012 To 2022, Congressional Budget Office, 1/31/12)


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