New deficit projections pose risks to Obama's agenda

[coyotes_geek]

WASHINGTON (Reuters) – President Barack Obama's domestic policy proposals will face the reality of skyrocketing deficits on Tuesday when officials release two government reports projecting huge budget shortfalls over the next decade.

The White House budget office and the Congressional Budget Office (CBO), a non-partisan arm of Congress, release updated economic forecasts and deficit estimates on Tuesday, providing further fiscal fodder to opponents of Obama's nearly $1 trillion healthcare overhaul plan.

Many of the figures are already known.

The White House has confirmed that its deficit estimate for the 2009 fiscal year, which ends September 30, will inch down to $1.58 trillion from $1.84 trillion after eliminating billions of dollars originally set aside for bank rescues.

Looking forward, an administration official told Reuters the 10-year budget deficit projection will jump by about $2 trillion to roughly $9 trillion from an original forecast of $7.1 trillion.

"One message the numbers will send is that the medium- and long-term deficits need to be addressed," said Chuck Marr, director of federal tax policy at the Washington-based Center on Budget and Policy Priorities, an analysis and research organization.

Obama has promised to do that. The president, a Democrat, says he will cut the deficit in half by the end of his four-year term, and he sees lowering healthcare costs as a key ingredient toward achieving long-term deficit reduction.

But Republicans charge that his proposals to extend coverage to uninsured Americans and create compe ion for private insurance providers are too expensive, especially as deficits go up.

UNSUSTAINABLE TRAJECTORY

"We're still on a long-run trajectory that's not sustainable," said Rudolph Penner, a fellow at the Urban Ins ute and former CBO director from 1983-1987.

"In an ideal world they would be doing a lot more to get health costs under control and, in my view, we wouldn't be talking about expanding coverage right now," said Penner, who describes himself as a moderate Republican.

The CBO had previously forecast that deficits between 2010 and 2019 would total $9.1 trillion, generating heat for the White House, which stuck to its original $7.1 trillion forecast earlier this year. The new number will bring White House projections into line with the CBO, the official said.

In line or not, the political challenges of the updated deficit projections are numerous. With Congressional elections looming next year, Obama will need to show he is serious about cutting costs in order to neutralize an otherwise politically radioactive issue for both political parties.

Many economists think it is unlikely that the government can curtail spending, which means taxes would have to rise to cover the increasing costs of providing retirement benefits and healthcare to older people. That could slow economic growth.

Stanford University economics professor John Taylor, an influential economist, told Reuters Television on Friday the U.S. budget deficit poses a greater risk to the financial system than the collapse in commercial real estate prices.

"If that gets out of control, if interest rates start to rise because people are reluctant to buy all that debt, then that can slow the economy down. So, that's the more systemic concern I have," Taylor said.

(Editing by Eric Walsh)

http://news.yahoo.com/s/nm/20090823/...obama_budget_1

[SpurNation]

Is it any wonder we have become a spend now pay later only for many to have to file bancruptcy society.

I mean...why not?...our government does. Oh wait...they don't file bancruptcy or have to be fiscally responsible...they have an open credit policy to continue to overspend and borrow no matter how much of a risk they would be considered.

What in the world got this country to this point? I mean...how could we as a people of this nation ever allow it to get to the deficit that has ac ulated?

We really have only ourselves to blame and it doesn't matter regarding our political affiliations. When it boils down to it...we are responsible for our actions and to spend time placing blame on others just to give us some sort or repreive from the bottom line is not, nor will it ever, change the course which has already been established through years of irresponsibility.

Is it any wonder our children look at us and say to themselves...pftt...what does it matter to be responsible?

[clambake]

wait a minute.......how long has this been going on, and why did we choose now to bring it up?

[DarrinS]

wait a minute.......how long has this been going on, and why did we choose now to bring it up?

Pointing out out-of-control spending is racist.

[SonOfAGun]

It's all good.

We took out Madoff because we hate compe ion.

[angrydude]

wait a minute.......how long has this been going on, and why did we choose now to bring it up?

the economy
the stimulus
proposed healthcare plans

all relevant.

[coyotes_geek]

wait a minute.......how long has this been going on, and why did we choose now to bring it up?

I chose now to bring it up because now because right now is when we have the most fiscally irresponsible administration in our nation's history. That's somethign I think they should be called out for. One year ago we had a different administration that was the most fiscally irresponsible at that point in history. I called them out on it too, just at a different forum since one year ago I wasn't posting here. If Obama's successor continues the trend I'll call him out on it too.

[clambake]

Pointing out out-of-control spending is racist.

ignoring out of control old white gasbag spending was racist.

[clambake]

I chose now to bring it up because now because right now is when we have the most fiscally irresponsible administration in our nation's history. That's somethign I think they should be called out for. One year ago we had a different administration that was the most fiscally irresponsible at that point in history. I called them out on it too, just at a different forum since one year ago I wasn't posting here. If Obama's successor continues the trend I'll call him out on it too.

are you talking about the healthcare proposal that won't pass, or the unimaginable financial meltdown that faced this new administration?

[DarrinS]

ignoring out of control old white gasbag spending was racist.

Bush spent like a liberal Democrat, but it pales compared to what God is doing.

[clambake]

Bush spent like a liberal Democrat, but it pales compared to what God is doing.

what is your god doing?

[coyotes_geek]

are you talking about the healthcare proposal that won't pass, or the unimaginable financial meltdown that faced this new administration?

I'm talking about Obama's own budget projections.

[clambake]

i hear ya. projections don't sting nearly as much as the reality from the gop.

[coyotes_geek]

i hear ya. projections don't sting nearly as much as the reality from the gop.

Huh? Obama's own projections are saying he's going to rack up more debt than any gop president ever did, so I'm not sure what you think you're gloating about here.

[Wild Cobra]

wait a minute.......how long has this been going on, and why did we choose now to bring it up?

Because president Bush's deficit spending for war is legitimate. Agree or disagree with the war itself, historically it's proper to deficit spend during war time. It is not legitimate to deficit spend for bailouts, especially the way they are being done. The economy will recover with or without the bailout. The bailout just rewards irresponsibility, so now we can be sure to get more irresponsibility.

Democrat presidents are terrible. Pushing expanded socialism. We had real growth while president Clinton was in office, and should have been paying off the debt. We had no legitimate reason to deficit spend under him.

[coyotes_geek]

Because president Bush's deficit spending for war is legitimate. Agree or disagree with the war itself, historically it's proper to deficit spend during war time. It is not legitimate to deficit spend for bailouts, especially the way they are being done. The economy will recover with or without the bailout. The bailout just rewards irresponsibility, so now we can be sure to get more irresponsibility.

Democrat presidents are terrible. Pushing expanded socialism. We had real growth while president Clinton was in office, and should have been paying off the debt. We had no legitimate reason to deficit spend under him.

I'll agree that if you're in a war (no matter how you got into it) you need to spend whatever you've got to spend on it, but that doesn't excuse Bush from not trying to help mitigate that cost by scaling back on his tax cuts or his domestic agenda.

[Wild Cobra]

I'll agree that if you're in a war (no matter how you got into it) you need to spend whatever you've got to spend on it, but that doesn't excuse Bush from not trying to help mitigate that cost by scaling back on his tax cuts or his domestic agenda.

There is ample evidence that the tax cuts helped. We would have had less revenue without them. Regardless of tax rates, we average about 18% federal tax revenue of the GNP. Lowering taxes increases the spending power of Americans, hence, increases the GNP:

[SonOfAGun]

clam is just pissed his employees are going to be granted amnesty and demand min. wage.

[Wild Cobra]

clam is just pissed his employees are going to be granted amnesty and demand min. wage.

Yep, he'll have to pay payroll taxed, workman's comp, etc. also.

[clambake]

Yep, he'll have to pay payroll taxed, workman's comp, etc. also.

i would expect this kinda talk from a......oh, i don't know........a union worker?

[Wild Cobra]

i would expect this kinda talk from a......oh, i don't know........a union worker?

LOL... and I dislike unions. I'm treated like everyone else. Lowest common denominator rather than by skills. In my last technical job, the 2000 wage scale varied from $24,400 to $76,060 base for this non-union job. $83k was the lowest I made with built in overtime, shift differential, and overtime. I made over $110k for two of the years I worked there. I was near the higher end. I don't have a pay scale for my current job available, but it's by seniority only. There is maybe a 20% difference top to bottom. I'll never break 5 figures now in the near future, especially now with limited availability to do overtime. These years later, and I'm lucky if I break $80k. The union's holding me down, but I'll stay for the job security. I'm old enough now, unless something phenomenal comes up, I stick with what I have.

[clambake]

LOL... and I dislike unions.

no you don't.

[Wild Cobra]

no you don't.

If you insist. I didn't know I liked unions. Silly me.

[clambake]

If you insist. I didn't know I liked unions. Silly me.

do you not like yourself?

[Wild Cobra]

do you not like yourself?

LOL...

You're so funny when I can keep from getting upset at you.