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Deficit Doom Predicted

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The Washington Post

Published: March 21, 2009

WASHINGTON - President Barack Obama's ambitious plans to cut middle-class taxes, overhaul health care and expand access to college would require massive borrowing during the next decade, leaving the nation mired far deeper in debt than the White House has previously estimated, congressional budget analysts said Friday.

In the first independent analysis of Obama's budget proposal, the nonpartisan Congressional Budget Office concluded that Obama's policies would cause government spending to swell far above historical levels even after costly programs to ease the recession and stabilize the nation's financial system have ended.

Tax collections, meanwhile, would lag well behind spending, producing huge annual budget deficits that would force the nation to borrow.

Although Obama would come close to meeting his goal of cutting the deficit he inherited in half by the end of his first term, the CBO predicts that deficits under his policies would exceed 4 percent of the overall economy in the next 10 years, a level that White House Budget Director Peter Orszag acknowledged Friday would "not be sustainable."

The result, according to the CBO, would be an ever-expanding national debt that would exceed 82 percent of the overall economy by 2019 - double last year's level - and threaten the nation's financial stability.

"This clearly creates a scenario where the country's going to go bankrupt. It's almost that simple," said Sen. Judd Gregg, N.H., the senior Republican on the Senate Budget Committee, who briefly considered joining the Obama administration as commerce secretary. "One would hope these numbers would wake somebody up."

Orszag defended the president's agenda in a conference call with reporters, noting that the forecast of bigger deficits and mounting debt is due largely to the CBO's view that the recession will be more severe and the recovery more tepid than the White House expects.

Orszag, was CBO director before joining the Obama administration, also argued that long-term budget estimates are notoriously uncertain. He noted that the CBO's projections leave open the possibility that the government could record a small surplus, rather than a $750 billion deficit, after five years.

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