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CBO Confirms That Obama Is The Undisputed Debt King

- February 5, 2013

CONTINUED DEFICIT SPENDING WILL PUT US AT RISK OF DEBT CRISIS

 “Deficits Are Projected To Increase Later In The Coming Decade, However, Because Of The Pressures Of An Aging Population, Rising Health Care Costs, An Expansion Of Federal Subsidies For Health Insurance, And Growing Interest Payments On Federal Debt.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

“By 2023, If Current Laws Remain In Place, Debt Will Equal 77 Percent Of GDP And Be On An Upward Path, CBO Projects.” “As a result, federal debt held by the public is projected to remain historically high relative to the size of the economy for the next decade. By 2023, if current laws remain in place, debt will equal 77 percent of GDP and be on an upward path, CBO projects (see Summary Figure 1).” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

“Such A Large Debt Would Increase The Risk Of A Fiscal Crisis, During Which Investors Would Lose So Much Confidence In The Government’s Ability To Manage Its Budget That The Government Would Be Unable To Borrow At Affordable Rates.” “Such high and rising debt would have serious negative consequences: When interest rates rose to more normal levels, federal spending on interest payments would increase substantially. Moreover, because federal borrowing reduces national saving, the capital stock would be smaller and total wages would be lower than they would be if the debt was reduced. In addition, lawmakers would have less flexibility than they might ordinarily to use tax and spending policies to respond to unexpected challenges. Finally, such a large debt would increase the risk of a fiscal crisis, during which investors would lose so much confidence in the government’s ability to manage its budget that the government would be unable to borrow at affordable rates.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

“Federal Debt Held By The Public Will Reach 76 Percent Of GDP By The End Of This Fiscal Year, The Largest Percentage Since 1950.” “The federal budget deficit, which shrank as a percentage of GDP for the third year in a row in 2012, will fall again in 2013, if current laws remain the same. At an estimated $845 billion, the 2013 imbalance would be the first deficit in five years below $1 trillion; and at 5.3 percent of GDP, it would be only about half as large, relative to the size of the economy, as the deficit was in 2009. Nevertheless, if the laws that govern taxes and spending do not change, federal debt held by the public will reach 76 percent of GDP by the end of this fiscal year, the largest percentage since 1950.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

The CBO Projects That Deficits Will Total $7 Trillion From 2014 To 2023. “For the 2014–2023 period, deficits in CBO’s baseline projections total $7.0 trillion.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

By 2023, The CBO Projects That Public Debt Will Reach $19.9 Trillion. (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

“With Such Deficits, Federal Debt Would Remain Above 73 Percent Of GDP—Far Higher Than The 39 Percent Average Seen Over The Past Four Decades.” “With such deficits, federal debt would remain above 73 percent of GDP—far higher than the 39 percent average seen over the past four decades. (As recently as the end of 2007, federal debt equaled just 36 percent of GDP.) Moreover, debt would be increasing relative to the size of the economy in the second half of the decade.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

Government Outlays Are Still Set To Exceed Their 40-Year Average Of 21 Percent. “Although outlays are projected to decline from 22.8 percent of GDP in 2012 to 21.5 percent by 2017, they will still exceed their 40-year average of 21.0 percent.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

Due To An Aging Population, Outlays Are Set To Grow Again As A Percentage Of GDP After 2017. “After 2017, if current laws remain in place, outlays will start growing again as a percentage of GDP. The aging of the population, increasing health care costs, and a significant expansion of eligibility for federal subsidies for health insurance will substantially boost spending for Social Security and for major health care programs relative to the size of the economy. At the same time, rising interest rates will significantly increase the government’s debt-service costs.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

“In CBO’s Baseline, Outlays Reach About 23 Percent Of GDP In 2023 And Are On An Upward Trajectory.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

The Deficits In CBO’s New Current Baseline Are $4.6 Trillion Higher Than Its Old Baseline. “The baseline budget outlook has changed substantially from the projections that CBO published in August 2012. At that time, deficits projected under current law totaled $2.3 trillion for the 2013–2022 period, or 1.1 percent of GDP. They are now $4.6 trillion larger. The majority of the increase in projected deficits stems from enactment of the American Taxpayer Relief Act of 2012 (P.L. 112-240) (see Box 1-1).” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

The Budget Deficit For FY2013 Be Larger “Than In All But One Year Between 1947 And 2008.”  “If current laws remain in place, the Congressional Budget Office (CBO) estimates, the federal budget deficit will total $845 billion in fiscal year 2013; this will be the first time since 2008 that the budget shortfall will be less than $1 trillion. At 5.3 percent of gross domestic product (GDP), that deficit will be well below the peak of 10.1 percent in 2009 but still larger than in all but one year between 1947 and 2008 (see Figure 1-1).” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

“As A Result, In CBO’s Baseline Projections, Annual Deficits Remain Above Their Prerecession 40-Year Average (1968 To 2007) Through 2023 Relative To The Size Of The Economy.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

“Debt Held By The Public Is Projected To Be Significantly Greater Relative To GDP Than At Any Time Since Just After World War II.” “First, under the current-law baseline, the projected debt is very high by historical standards. Throughout the 2013–2023 period, debt held by the public is projected to be significantly greater relative to GDP than at any time since just after World War II; at no time is it anticipated to fall below the percentage of GDP it represented in any year between 1951 and 2012.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

“CBO Estimates That Outlays In 2013 Will Total $3.55 Trillion, Within 0.4 Percent Of Outlays Recorded In 2012.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

OBAMA’S ECONOMIC RECORD WILL CONTINUE TO BE ONE OF STAGNATION

 “The Unemployment Rate Is Expected To Remain Above 7½ Percent Through Next Year”, Making It The Sixth Consecutive Year With An Unemployment Rate Above 7.5 Percent - “The Longest Such Period In The Past 70 Years.” “Nevertheless, the unemployment rate is expected to remain above 7½ percent through next year; if that happens, 2014 will be the sixth consecutive year with unemployment exceeding 7½ percent of the labor force—the longest such period in the past 70 years.” (“Budget And Economic Outlook,” Congressional Budget Office, 2/5/13)

“CBO Expects That Economic Activity Will Expand Slowly This Year, With Real GDP Growing By Just 1.4 Percent (See Summary Table 2).” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

“That Subdued Economic Growth Will Limit Businesses’ Need To Hire Additional Workers, Thereby Causing The Unemployment Rate To Stay Near 8 Percent This Year, CBO Projects.” “That subdued economic growth will limit businesses’ need to hire additional workers, thereby causing the unemployment rate to stay near 8 percent this year, CBO projects.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

“CBO Expects The Unemployment Rate To Remain High—Above 7½ Percent Through 2014.” “Nevertheless, under current law, CBO expects the unemployment rate to remain high—above 7½ percent through 2014—before falling to 5½ percent at the end of 2017.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

CBO Says That The GDP Growth Projected For 2019 To 2023 Is “Much Slower Than The Average Growth Rate Of Potential GDP Since 1950” Due To The Retirement Of Baby Boomers And A Stabilizing Of Female Participation In The Labor Force. “On that basis, CBO projects that both actual and potential real GDP will grow at an average rate of 2¼ percent a year between 2019 and 2023. That pace is much slower than the average growth rate of potential GDP since 1950. The main reason is that the growth of the labor force will slow down because of the retirement of the baby boomers and an end to the long-standing increase in women’s participation in the labor force.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

The CBO Says That U.S. Economic Output Is “Likely To Remain Below Its Potential” Until 2017. “Although CBO anticipates faster economic growth after this year, output is likely to remain below its potential (or maximum sustainable) level until 2017—almost a decade after the recession started in December 2007.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

The Labor Market Remains Weak. “The labor market improved modestly in 2012, although it remains weak—primarily because overall demand for goods and services, and thus businesses’ need to hire additional workers, has been growing slowly. In addition, inflation in consumer prices eased, and both short- and long-term interest rates stayed very low.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

“According To CBO’s Estimates, Employment In The Fourth Quarter Of 2012 Was More Than 6½ Million Less Than It Would Have Been If The Economy Had Been Operating At Its Maximum Sustainable Level.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

The Share Of Long-Term Unemployed Under Obama Has Been “Far Higher Than In Any Other Three-Year Period Since World War II.” “Such structural factors have contributed to the historically high share of unemployment accounted for by the long-term unemployed, people who have been seeking work for more than 26 consecutive weeks. That share has topped 40 percent for the past three years (see Figure 2-3), far higher than in any other three-year period since World War II. CBO expects that share to remain high for the next few years.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

OBAMACARE FAILS TO BEND THE COST CURVE AS SPENDING ON HEALTH PROGRAMS CONTINUES TO RISE THROUGH 2023

CBO Projects That Health Care Spending Will “Grow Rapidly” Once ObamaCare Is Fully Implemented, Reaching 6.2 Percent Of GDP In 2023. “Spending for major health care programs will be nearly 5 percent of GDP in 2013, and such spending is projected to grow rapidly when provisions of the Affordable Care Act are fully implemented by middecade, reaching 6.2 percent of GDP in 2023.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

CBO Projects That Employers Will Pay $130 Billion In ObamaCare Mandated Penalties From 2013 To 2022. (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

CBO Projects That Spending On Federal Subsidies For The ObamaCare Mandated Exchanges Will Increase From “0.1 Percent Of GDP In 2014 To 0.5 Percent” In 2023. “In addition, spending on subsidies that will help people purchase health insurance through exchanges (which will become available starting in 2014 for individuals and families who meet income and other eligibility criteria), along with related spending, is projected to increase from 0.1 percent of GDP in 2014 to 0.5 percent 10 years from now.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

ObamaCare’s Coverage Provisions Are Projected To Cost More Than $1.3 Trillion From 2013 To 2023. “In August, CBO and JCT projected the net cost of the act’s provisions that concern health insurance at $1,165 billion for the 2013–2022 period; that amount remains essentially unchanged. For the 2013–2023 period covered by the current projections (one year beyond the previous ones), the estimated cost of those coverage provisions is $1,329 billion.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

CBO Projects That “7 Million Fewer People Will Have Employment-Based Health Insurance As A Result” Of ObamaCare. “In 2022, by CBO and JCT’s estimate, 7 million fewer people will have employment-based health insurance as a result of the Affordable Care Act; in August, that figure was estimated to be about 4 million people.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

Rising Health Care Costs And ObamaCare’s Subsidies “Will Substantially Boost Spending For Social Security” And “Major Health Care Programs, Relative To GDP, For The Next 10 Years And For Decades Thereafter.” “Under current law, the aging of the population, the rising costs of health care, and the scheduled expansion in federal subsidies for health insurance will substantially boost federal spending on Social Security and the government’s major health care programs, relative to GDP, for the next 10 years and for decades thereafter.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

  • “Debt Will Rise Sharply Relative To GDP After 2023” Unless Changes Are Made.“Unless the laws governing those programs are changed—or the increased spending is accompanied by corresponding reductions in other spending, sufficiently higher tax revenues, or a combination of the two—debt will rise sharply relative to GDP after 2023.” (“The Budget And Economic Outlook: Fiscal Years 2013 To 2023,” Congressional Budget Office, 2/5/13)

 


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