President Obama’s budget may add $6.8 trillion to deficits over the next decade once the economic effects of his proposals are taken into account, according to a new analysis by the Congressional Budget Office.
Last month, the CBO came out with a report projecting that Obama’s budget would add $6.4 trillion to deficits from 2013 to 2022. But now the agency has taken more time to analyze the economic effects of his proposals. What it found was that in the near term, from 2013 to 2017, Obama’s budget would likely boost the economy because he preserves most of the Bush tax cuts, which would otherwise completely expire at the end of this year. However, in the second half of the decade, CBO estimates that under Obama’s budget, the nation’s debt problem would be so severe that it would begin to harm the economy. CBO explains:
This, in turn, would exacerbate the debt problem. Taken together, the CBO now estimates that deficits could be as high as $6.8 trillion if Obama’s budget were adopted.
By comparison, Rep. Paul Ryan’s budget that was passed by the Republican-controlled House is projected to increase deficits by $3.1 trillion over the same time period, although the CBO has not factored in the economic effects of his proposals.
