Former Congressional Budget Office Director Douglas Holtz-Eakin says the Obama administration’s claim that the Obama’s updated figures on the deficit that will be released Tuesday are “spin and nothing more.”
Holtz-Eakin, who was a top advisor to the presidential campaign of Sen. John McCain, R-Ariz., sent a memo Monday to House Minority Leader John Boehner, R-Ohio, accusing Obama of manipulating the numbers about future bailout costs in making the claim that the deficit will shrink by more than $260 billion from what was predicted three months ago.
“Bottom line, the budget outlook is worse, and dangerous,” Holtz-Eakin writes to Boehner.
The White House and the CBO are scheduled to release separate mid-session reviews on Tuesday, but the Obama administration has already leaked to the press some of the details of its report, including the rosier deficit forecast of $1.58 trillion for this year, lower than the $1.8 trillion predicted in June.
Holtz-Eakin said that said the Obama administration wrongly assumes it will receive $640 billion in revenue from the creation of a cap-and-trade system for polluters, which would rely on the passage of an energy reform bill that many Democrats oppose, plus another $200 billion from a controversial proposal to tax international businesses. The Obama administration is also counting on the idea that health care reform will not increase the deficit, which some believe is impossible.
“They will continue to assume that they raise taxes on small businesses in 2011,” Holtz-Eakin added. “If the economy remains weak, they will not.”
