The White House today finally admitted what the Congressional Budget Office already knew months ago, that the actual budget deficit will be around $1.85 trillion as opposed to the modest $1.75 trillion first estimated by team Obama.
Yahoo News reports:
WASHINGTON (Reuters) – The White House on Monday raised its forecast for this year’s U.S. budget deficit by $89 billion due to the recession, millions of new unemployment claims and corporate bailouts.
The new estimate predicted a deficit of $1.84 trillion, or 12.9 percent of gross domestic product, for the fiscal year ending September 30. It updated the White House’s February forecast of a $1.75 trillion deficit, or 12.3 percent of GDP.
The report may add to the political challenges facing President Barack Obama as he seeks to push through a new healthcare plan and other domestic initiatives.
White House officials said the gloomier picture reflected weaker tax receipts as the economy declined and higher costs for social safety-net programs such as unemployment insurance. Spending on government rescues for the financial and automobile industries also played a part.
While the Democratic-led Congress has approved the broad outline of Obama’s proposed FY 2010 budget that includes initiatives on healthcare, education and other items, many lawmakers are wary about the deficit outlook.
Republicans contend Obama’s agenda would sharply increase the size of government and add to a mountain of debt.
“It’s clear that there is much more that we can do to protect our children and grandchildren from the unprecedented trillions in additional debt proposed by the administration,” Senate Republican leader Mitch McConnell said in a statement.
Once again, the Obama administration played the “blame Bush” card on the deficits and failed:
The White House countered that Obama inherited huge deficits from his Republican predecessor President George W. Bush. The higher deficits “are driven in large part by the economic crisis inherited by this administration,” White House budget director Peter Orszag said on his blog.
The report from the White House Office of Management and Budget also revised the deficit higher for fiscal year 2010, to $1.26 trillion, or 8.5 percent of GDP, $87 billion more than February’s $1.17 trillion projection.
Here’s the graph of the truth in this regard from the initial administration estimate and correct CBO estimate:
Bush’s highest deficit was a little over $400 billion. For President Obama to blame him for his own deficit which is over 3 times as high as Bush’s is dishonest and unseemly.
I’m glad the White House has come clean, albeit only because they could no longer distort reality as the numbers don’t lie.
On a similar topic, the White House has also admitted that there will be no job recovery in 2009 despite massive spending on President Obama’s pork-laden stimulus bill which had to be passed before the sky fell and the country was torn apart.
The New York Times takes this one:
President Obama’s chief economics forecaster said on Sunday that the country was not likely to see positive employment growth until 2010, even if the economy began to grow later this year.
Speaking on C-SPAN, Christina Romer, chairwoman of the White House Council of Economic Advisers, said that she expected the G.D.P. to begin growing in the fourth quarter of this year. Ben S. Bernanke, the Federal Reserve chairman, made a similar prediction last week.
But Ms. Romer also said that she expected unemployment to rise even after the economy turns, saying that the G.D.P. has to grow at a rate of about 2.5 percent before unemployment will fall. Before that happens, she said, it is “unfortunately pretty realistic” that the unemployment rate could reach 9.5 percent. A reasonable estimate for the G.D.P.’s growth rate in 2010, she said, is three percent.
Robert Reich, who served as labor secretary under President Bill Clinton and advised the Obama campaign, said on Sunday that the rate of growth would have to be higher — 4.5 percent — to reverse rising unemployment.
I’m wondering if any of you who were counting on President Obama’s stimulus bill to get you a job and pay your mortgage are feeling neglected, let down and basically used for your vote? I hope so since maybe you’ll realize government isn’t the solution to your life and never was nor will it ever be.
For further illustration, take a look at this chart which was used to sell the pork-filled stimulus plan to America:
The White House painted a false picture in order to sell their stimulus plan. Note that the graph shows unemployment never going above 8% as long as we pass the “Recover Plan.”
Well guess what, we passed it and unemployment is nearing 9%. Perhaps this is because the entire stimulus plan was a sham to grow government, not actually a solid plan stimulate the free market economy.
Also, if you are of the mindset that numbers are revised over time and we need to cut the administration some slack, then it should comfort you to know that most of the numbers they used to sell President Obama’s plans with have now all changed. This, of course, means that the numbers were totally bogus to begin with and were used to force bad legislation onto the American people using fear mongering words like “disaster” and “catastrophe”.
President Obama’s economic plans are a catastrophic disaster and that’s becoming more clear everyday with every new revised estimate. The stimulus plan was so imperative that they rushed it through yet it has been nothing but a complete waste and disaster putting us further in debt and doing nothing to stimulate the private sector.