The White House seized on the figures as validation of its assertions that Obama’s budget brings the deficit under control - at least when measured against the economy, the measure used by most economists in evaluating the deficit.
“CBO found that by 2016 deficits as a share of the economy would be below 3 percent - a key milestone of fiscal sustainability,’’ said Jeffrey Zients, White House budget office acting director “Debt held by the public will decrease and then stabilize as a share of the economy, also a key indicator of improving fiscal health.’’
The nonpartisan Congressional Budget Office said Obama’s budget office consistently overestimates tax revenues over the coming decade. CBO congressional office predicts revenues on average that are about $120 billion less each year than predicted by the White House.
Still, the congressional office said Obama’s budget would generate somewhat lower deficits over the coming decade than the White House predicts. Much of that is due to lower interest costs and less generous cost-of-living adjustments in Social Security benefits. The forecasting differences for 2013 aren’t unusual and generally are caused by the congressional office’s less optimistic view of the economy over the next couple of years. The White House forecasts higher income and corporate profits.
For the current budget year, the congressional office says Obama’s policies, if enacted, would generate a $1.25 trillion deficit. That’s $74 billion better than the White House forecast but still represents the fourth consecutive year of trillion dollar-plus deficits.
The report is a precursor to the annual budget debate in Congress. Paul Ryan, a Wisconsin Republican who chairs the House Budget Committee, plans next week to unveil his budget plan, which will call for sharply lower spending on federal health care programs, lower taxes than called for by Obama, and less money for the day-to-day budgets of federal agencies than called for in last year’s budget and debt pact.
