Reporting on President Obama’s appearance at Facebook headquarters in California this week, the AP writes, “Obama said that unless lawmakers get the country’s long-term finances under control, more immediate economic gains could prove difficult. ‘If we don’t have a serious plan to tackle the debt and the deficit, that could actually end up being a bigger drag on the economy than anything else,’ Obama said.”

The president calling for “a serious plan to tackle the debt and the deficit” is certainly an interesting statement in light of the poor marks his latest budget plan received following his speech last week.

On top of that, The Washington Post reported last night, “President Obama’s deficit-reduction plan ‘falls short’ of targets set by House Republicans and Obama’s own fiscal commission and would be unlikely to stabilize borrowing, according to a new independent analysis [by the bipartisan Committee for a Responsible Federal Budget]. . . . The new outline is a significant improvement over the budget request Obama submitted to Congress in February, which would have required $9.5 trillion in fresh borrowing through 2021. However, the framework is unlikely to reduce deficits as much as Obama suggested, the analysis found, and would therefore permit the portion of the national debt held by outside investors to continue rising, when measured against the size of the economy, to just less than 80 percent of gross domestic product by the end of the decade. By contrast, the budget blueprint adopted last week by the House matches the fiscal commission’s plan ‘dollar for dollar’ with new savings, according to the analysis.”

The Post notes, “‘At the same time, when compared to the House budget and Fiscal Commission plan, the President’s Framework falls short,’ the analysis says, adding that the level of savings achieved by both the GOP plan and the fiscal commission ‘is the minimum level of savings policymakers should aim for.’”

According to the article, “White House spokeswoman Amy Brundage defended the president’s plan, arguing that the committee’s analysis relies on economic forecasts by the Congressional Budget Office that are less optimistic than forecasts by the White House budget office. ‘Under the administration’s estimates, the president’s framework saves $2.9 trillion over 10 years and $4 trillion over 12 years,’ Brundage said.”

It’s worth pointing out, though, that even granting the assumptions in the president’s plan, the $2.9 trillion shaved off the deficit over 10 years that the White House’s spokeswoman asserts, is less than the amount that has been added to the debt over the last two years. According to the Treasury Department’s website, the total public debt was more than $10.6 trillion on the day of President Obama’s inauguration, and was more than $14 trillion two years later, an increase of over $3.4 trillion in just 24 months.

Related:

Rasmussen Reports: 67% Say U.S. Still in Recession 

Comments

comments