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Federal Budget Deficits Will Reach Levels Never Seen Before in the U.S.
Under current law, the budget deficit is projected to grow to 24.5 percent of GDP by 2082, even if the 2001 and 2003 tax cuts are allowed to expire and the AMT is not fixed. This will be driven by , with deficits well above the 30-year historical average of 2.5 percent. Deficits of this size have never been seen in the U.S. and illustrate the need to reform these programs.
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Obama's Budget Would Send Debt to Levels Not Seen Since World War II
In 2008, publicly held debt as a percentage of the economy (GDP) was 40.8 percent, nearly five points below the historical average. Under President Obama's budget, this figure would more than double to 82.4 percent by 2019, and interest payments alone on this debt would be $100 billion more than Obama projects to spend on the entire Department of Defense.
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Obama's Budget Would Increase Debt by 26.3 Percent of GDP Compared to CBO Baseline
The non-partisan Congressional Budget Office projects that publicly held debt will reach 56.1 percent of GDP under current law. If President Obama's budget is implemented, CBO projects debt to reach 82.4 percent of GDP.
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Obama's Budget Would Create Unprecedented Deficits
Since the 1960s, deficits driven largely by increased levels of spending have been the norm, while surpluses were an exception. The 2009 Congressional Budget Office deficit projection under President Obama's plan is far above the 45-year historical average of 2.2 percent of GDP.
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The Unfunded Liabilities of Entitlement Programs Dwarf Recent Bailout Spending
Recently, massive federal government spending on programs such as the Troubled Asset Relief Program (TARP), the 2009 economic stimulus bill, and the bailout of AIG has dazzled the nation with their enormous price tags. However, the cost of the unfunded obligations for Social Security and Medicare are more than 61 times the cost of TARP alone.
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