The Congressional Budget Office has been busy lately debunking claims about the cost of Obamacare. Now the non-partisan agency has turned its sights to the president's budget and the administration claims that it will reduce the deficit by $3.2 trillion over the next 10 years.
We received an email from Victoria Coley of Public Notice, a non profit organization "dedicated to providing the facts and insights on the affects public policy has on American's financial well being." Victoria writes:
Today the Congressional Budget Office released its official score of President Barack Obama's fiscal year 2013 budget outline. Last month, the White House estimated the President's plan would cut the growth of federal deficits by $3.2 trillion over 10 years; the CBO found the opposite - the budget would increase the growth of deficits $3.5 trillion over the next decade.
"Unfortunately, the President's budget is a continuation of the overspending policies of the last ten to 12 years," said Gretchen Hamel, executive director of Public Notice. "Washington policymakers - from the U.S. Capitol down Pennsylvania Avenue to the White House - have promised Americans they're serious about cutting the federal budget deficit. We haven't seen much action from Congress this year and now we find the President's plan only adds to the problem. Taxpayers are disappointed. They want reform. And they want it now."
In the last decade, federal government spending has gone from 19.1 percent of the economy in 2002 to 24.3 percent in 2012. The annual deficit has gone from 1.5 percent of the economy to an expected 8.5 percent this year. The federal debt, $6 trillion ten years go, is now more than $15 trillion and is larger than the size of the actual economy. According to CBO, under the President's plan the cumulative national debt would be $18.8 trillion in ten years.
That 10 year, $18.8 trillion cumulative debt number is wildly optimistic. It assumes strong economic growth, low inflation, extremely low interest rates, and low unemployment. None of that is likely to happen which means a national debt over $20 trillion by 2022 is far more likely.