So much for the fiscal responsibility promised by President Obama. The AP is reporting that the federal deficit, at $1.8 trillion, is four times higher than the deficit last year. In fact, it’s at the highest level since WWII.
The unprecedented deficit figures flow from the deep recession, the Wall Street bailout and the cost of President Barack Obama’s economic stimulus bill — as well as a seemingly embedded structural imbalance between what the government spends and what it takes in.
As the economy performs worse than expected, the deficit for the 2010 budget year beginning in October will worsen by $87 billion to $1.3 trillion, the White House says. The deterioration reflects lower tax revenues and higher costs for bank failures, unemployment benefits and food stamps.
Just a few days ago, Obama touted an administration plan to cut $17 billion in wasteful or duplicative programs from the budget next year. The erosion in the deficit announced Monday is five times the size of those savings.
For the current year, the government would borrow 46 cents for every dollar it takes to run the government under the administration’s plan. In 2010, it would borrow 35 cents for every dollar spent.
“The deficits … are driven in large part by the economic crisis inherited by this administration,” budget director Peter Orszag wrote in a blog entry on Monday.
The developments come as the White House completes the official release of its $3.6 trillion budget for 2010, adding detail to some of its tax proposals and ideas for producing health care savings. The White House budget is a recommendation to Congress that represents Obama’s fiscal and policy vision for the next decade.
Don’t you love the way Peter Orszag repeated the meme that the deficit is an inherited problem? Obama signed the porkulus bill and he signed the huge 2010 budget that the democrats waited to push through, knowing President Bush would have handed them a veto.
Should President Obama succeed in ramming through his entire agenda, the deficits will only get worse. The economy will continue to decline, thereby reducing tax receipts needed to pay for all of this spending. And you can have no doubt that Obama administration officials and the democrats will continue to put the blame everyplace but where it belongs.
