The White House today released its updated federal budget projections. By releasing the report late on a Friday afternoon—a longtime Washington tradition for stories that politicians want to bury—the Obama Administration is effectively admitting that its budget numbers will not be well-received.
The “Mid-Session Budget Review” projects that this year’s budget deficit will reach $1.471 trillion, or 10 percent of the economy. In nominal dollars, it’s the largest deficit in American history. As a percentage of the economy, it’s the largest deficit since World War II.
This will be the second consecutive year of trillion-dollar deficits that approach 10 percent of the economy. By comparison, the previous post–World War II record was 6 percent of the economy in 1983. Under President George W. Bush, deficits typically ranged between $160 billion and $400 billion (around 3 percent of the economy).
And the Obama Administration concedes that these large deficits are here to stay. It projects another $1.4 trillion deficit in 2011, followed by sustained deficits that never fall below $698 billion. The national debt held by the public—$5.8 trillion at the end of 2008—would soar to $18.5 trillion by the end of this decade.
These future deficits are driven almost exclusively by rising spending. President Obama’s budget would push inflation-adjusted federal spending past $36,000 per household by 2020—$12,000 above the level that prevailed under President Bush. Even President Obama’s enormous and anti-growth $3 trillion tax increase proposal won’t stop this spending spree from pushing the national debt to economically dangerous levels.
The Mid-Session Budget Review also confirms the failure of Obama’s economic agenda. The President concedes that the unemployment rate will remain at nearly 10 percent this year and not revert to pre-recession levels until 2016—and even that is based on the same optimistic Keynesian economic models that claim the stimulus created or saved 3 million jobs. If this is economic policy success, one wonders how failure would look.
With the Mid-Session Budget Review, the Obama White House has once again confirmed its agenda of runaway spending, surging taxes, and soaring budget deficits. And its economic figures concede that high unemployment rates will be a mainstay of the Obama presidency.