President Obama’s proposed budget would add $6.4 trillion to the nation’s deficits over the next decade, according to a new analysis by the Congressional Budget Office.
By 2022, this would bring debt held by the public to $18.8 trillion, or 76.3 percent of the gross domestic product, according to the analysis.
Compared with the CBO baseline, Obama’s budget would add $3.5 trillion to deficits from 2013 through 2022, both because he would extend many of the Bush tax cuts and increase spending. Overall, spending would be about $1.1 trillion higher than the CBO baseline and revenues would be $2.4 trillion more.
On the flip side, the CBO values the Obama administration’s “war savings” at $800 billion. This is money that appears as deficit reduction on paper because the CBO baseline assumes a perpetual major commitment to Iraq and Afghanistan.
The CBO forsees deficits of $1.25 trillion in 2012 and $977 billion in 2013 under Obama’s budget. Those are projected to decline as the economy improves, before pick up again by the end of the decade. See chart below.
