CBO: Administration's Deficit Projections From 2011-2020 Are About $1.2 Trillion Too Low
In a recent letter to Senate Appropriations Committee Chairman Daniel K. Inouye, CBO Director Douglas W. Elmendorf provided the CBO's analysis of President Obama's budget submission for the 2011 fiscal year.
The CBO (Congressional Budget Office) is a non-partisan government agency that is charged with the task of providing analysis of economic data to Congress. They analyze different legislative and budget proposals and then return their findings to Congress.
As mentioned, the CBO analyzed President Obama's budget submission for the 2011 fiscal year and returned their findings earlier today.
Here are some of the findings that stood out for me:
-CBO estimates that combined deficits from the 2011-2020 period will be $1.2 trillion higher than what the Administration is currently projecting, due to the CBO projecting "lower baseline revenues"
-CBO estimates that debt held by the public would grow from $7.5 trillion (at the end of 2009) to a whopping $20.3 trillion by the end of 2020
-net interest (cost to service the public debt) would be 4.1% of GDP by 2020, up from 1.4% in 2010
-CBO estimates deficits of $1.5 trillion in 2010 and $1.3 trillion in 2011 "if the President's proposals were enacted"
-deficits would fall to 4% of GDP by 2010 but would steadily rise after that
-combined deficits between 2011 and 2020 would be just under $10 trillion ($9.76 trillion to be exact)
While the Obama Administration and CBO seem to have differing opinions on revenue and spending levels over the next decade, the one thing that they can definitely agree upon is this - the US will be significantly adding to its debt load over the coming decade.
Source: CBO.gov - Preliminary Analysis of the President's Budget
Filed under: The Economic Meltdown