First the good news: according to Congressional Budget Office projections, the federal government will add only $845 billion to our national debt in 2013. If this projection does come true, it would be the first time ever that President Obama has presided a federal government that did not run a trillion dollar deficit. Even better, the CBO also predicts that the deficit will fall every year until 2015 when it will reach just $430 billion. Unfortunately, everything is downhill from there.
By the time Obama is scheduled to leave office, the federal deficit will be up over $500 billion thanks in no small part to Obamacare health exchange subsidies which will be sucking $95 billion out of federal coffers by 2017. By the end of the CBO’s current ten-year window, the Obamacare exchanges will cost almost $140 billion a year. Throw in the Medicaid expansion and other sundry spending items and the CBO now puts Obamacare’s gross cost at $1.6 trillion through 2023. By that time, health care spending will eat up almost one-third of the entire federal budget, and all entitlement spending (Medicare, Medicaid, Obamacare, Social Security, food stamps, etc) will eat up 64 percent of all government spending. By contrast, in 1972 entitlements made up only 38 percent of the federal budget.
Thanks to this explosive growth in entitlement spending, the CBO predicts that federal deficits will sneak back near the trillion dollar mark, $978 billion, by 2023. And that is if everything goes perfectly. For the fifth year in a row, the CBO has predicted a robust economic recovery is just around the corner. Every year since 2009 the CBO has predicted 3 percent economic growth was just one year away from happening. And every year they have been wrong.
Undaunted, the CBO again predicts 3.4 percent economic growth next year and 3.6 percent growth for from 2015 through 2018. As Real Clear Politics’ Sean Trende notes, these numbers assume the U.S. economy goes 193 months without a recession. But the U.S. record is 128 months without a recession and the post-war average is just 69 months. Already, the CBO predicted 1.4 percent economic growth in the 4th quarter of 2012 while the Commerce Department reported last week that economic growth was actually -.1 percent.
Less economic growth means less government revenues which, since our entitlement programs are set on auto-pilot, means much higher deficits. Unless major reforms are made to our big four entitlement programs (Social Security, Medicare, Medicaid, and Obamacare) trillion dollar deficits will return a lot fast than CBO currently projects.
From The Washington Examiner
Examiner Editorial: To avoid sequester, GOP should demand entitlement reform
Phil Klein: GOP finally has upper hand
Tim Carney: Twitter wins sweetheart tax deal with promises to politicians
Michael Barone: At last, Republicans make their case to Main Street
In Other News
The New York Times, Drone Strikes’ Dangers to Get Rare Moment in Public Eye: President Obama’s quasi-secret campaign of targeted killings against overseas suspected militants will face scrutiny today when White House counterterrorism adviser John Brennan faces a Senate confirmation hearing as Obama’s nominee for C.I.A. director.
Politico, Obama’s sequester plan already DOA on Hill: President Barack Obama’s proposal to delay sequestration appeared dead on arrival in the House — even before he announced it.
The Wall Street Journal, Tensions Flare as Japan Says China Threatened Its Forces: Japan accused China’s navy of locking weapons-guiding radar onto Japanese naval forces twice in the past three weeks, an escalation of their territorial dispute that has heightened fears of a military conflict between the Asian giants—one that could entangle the U.S.
National Journal, Bob Menendez Spent Up to 87 Percent of Wealth Paying Back Donor: Menendez’s decision last month to use his personal funds to reimburse a prominent political contributor $58,500 for two flights to the Dominican Republic came at a major cost. The repayment amounts to between 32 percent and 87 percent of the assets Menendez reported holding in bank accounts and stock, according to his latest financial-disclosure form, which was filed last year.
Harold Meyerson says California is back.
Think Progress notes that New York City’s Teen Pregnancy Rate Plummeted After High Schools Expanded Access To Plan B
Greg Sargent posts the Congressional Progressive Caucus budget which raises taxes by $1 trillion.
John McCormack on Marco Rubio’s Evolution on Immigration Reform.
Chris Edwards says we should Get the Feds Out of Infrastructure.
Benjamin Wittes on why the new targeted killing White Paper is not a big deal.