Saturday, August 22, 2009

Bush Economic Policies Will Force Obama To Spend $2 Trillion In Excess Each Year

AP Sources: $2 Trillion Higher Deficit Projected

Remember that annual report that was delayed by the Obama administration in July? Well it appears to be landing like a stink bomb. What was expected to be a $1,600 billion hole is likely to be a $2,000 billion hole in the annual budget. (To be clear - Budge Deficit = annual. Federal Debt = Debt owned in Treasuries which is approaching $12,100 billion per the new debt ceiling that is likely to be raised a second time this year when the Federal Democrats reopen congress from its August recess period).

The new projection, to be announced on Tuesday, is for a cumulative 2010-2019 deficit of $9 trillion instead of the $7 trillion previously estimated. The new figure reflects slumping revenues from a worse economic picture than was expected earlier this year. The officials spoke only on the condition of anonymity ahead of next week's announcement.

Ten-year forecasts are volatile figures subject to change over time. But the higher number will likely create political difficulties for President Barack Obama in Congress and could create anxiety with foreign buyers of U.S. debt.

Earlier this week, the White House revealed that it expects a budget deficit for the fiscal year ending Sept. 30 to be nearly $1.6 trillion.
That figure was lower than initially projected because the White House scratched out $250 billion that it had initially added to the budget as a bank rescue contingency. The administration ultimately did not ask Congress for that money.

Still that number, together with the 10-year projection, represents a huge obstacle for an administration trying to undertake massive policy overhauls in health care and the environment.

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