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Nov-04-2009Policies sought to add jobs without piling on the deficit(topic overview)
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The debt, currently at $12 trillion, is expected to grow by $9 trillion over the next decade. Though Orszag said that deficit spending is necessary to stimulate the economy when unemployment is hovering around 10 percent, he said red ink must be stopped as the economy recovers and private investment increases. '''It is at this point that we are likely to observe a rise in interest rates, an increase in borrowing from abroad, or some combination thereof due to the deficits,''' Orszag said. '''And it is at that point that deficits will be putting the health of our economy in jeopardy rather than helping to mitigate the most severe economic downturn in more than 50 years, as they are now.''' Orszag'''s remarks were just the latest this week from an administration aiming to show that it, too, is concerned about the country'''s fiscal situation. Treasury Secretary Timothy Geithner said last Sunday on NBC'''s '''Meet the Press''' that the president was committed to reducing the deficit while also upholding his pledge not to increase taxes on those making less than $250,000. Republicans have pointed to this year'''s record deficit and projections of near-trillion-dollar deficits for years to come as evidence of the White House'''s fiscal irresponsibility. [1] "The president and his economic team are busy working on a range of options as we prepare for the fiscal year 2011 budget to be released in February," Orszag said. Obama has pledged not to raise taxes on American families who make less than $250,000, but critics say they cannot see how some form of tax hike can be avoided. Orszag did not provide details, beyond noting several steps to cut costs that have already been taken, but he reiterated Obama's pledge to cut the deficit "we inherited" in half by January 2013. Failure to act could push up U.S. interest rates, deter investments and force the country to rely on foreign lenders to finance its spending needs, Orszag said. He also cautioned that the current situation of low rates, despite the record deficit, was "a product of the extraordinary economic environment in which we currently find ourselves" that would likely not last as the economic recovery gathered steam. "It is at this point that we are likely to observe a rise in interest rates, an increase in borrowing from abroad, or some combination thereof due to the deficits," Orszag said. In answering questions from the audience after delivering his speech, Orszag cited the Great Depression as an important lesson in not withdrawing stimulus too quickly from a still-vulnerable economy that is still recovering. "In the Great Depression," he said, "a key policy mistake that was made was taking off fiscal stimulus too quickly." The International Monetary Fund on Tuesday projected higher debt levels for the world's major economies, but emphasized it was too soon to begin scaling back fiscal support for their economies.[2]
"We are currently considering a number of proposals to put our country back on firm fiscal footing, and to cut the deficit we inherited in half by the end of the president's first term. Orszag notes that the administration faces $9 trillion in budget deficits over the coming decade, nearly all of which he blamed on policies Obama inherited: $4 trillion in tax cuts implemented by George W. Bush; $3.5 trillion in lower revenue and automatic spending increases, such as food stamps and unemployment insurance, due to the recession; and $700 billion in Medicare prescription drug costs. Only 10% of the $9 trillion comes from the economic stimulus package passed in February, he says.[3] Mr. Orszag, the director of the Office of Management and Budget, outlined the administration'''s contention that '''the entire $9 trillion''' has three causes that Mr. Obama inherited: the 2001 and 2003 tax cuts, the Medicare prescription drug benefit that the Bush administration and Congress passed without offsetting savings and the costs of combating '''the worst economic downturn since the Great Depression.''' '''Now assigning blame never solves a problem, but it is important to understand that we didn'''t get where we are merely as a result of bad luck,''' Mr. Orszag said in his prepared remarks. To solve it, he added, '''We are currently considering a number of proposals to put our country back on firm fiscal footing and to cut the deficit we inherited in half by the end of the president'''s first term.'''[4]
Next year's fiscal shortfall is expected to be about the same size, and current projections show $9 trillion in deficits over the next 10 years, averaging about 5 percent of GDP, said Peter Orszag, director of the Office of Management and Budget. "Deficits of this size are serious, and ultimately unsustainable," Orszag said at New York University. He blamed the funding gap on the failure of the administration of Republican President George W. Bush to finance its tax cuts and subsidies to Medicare prescription drugs as well as the recession. The Obama administration is weighing its options on how to put things right, Orszag said.[2] "We are currently considering a number of proposals to put our country back on firm fiscal footing, and to cut the deficit we inherited in half by the end of the President's first term," Orszag said in remarks delivered at New York University. Orszag, however, gave no details on the higher taxes or spending cuts that will be required to curb the deficit. Obama has endorsed most of Bush's tax cuts except for those only benefitting people making more than $250,000 a year. Red ink reaching such levels would equal almost 4 percent of the size of the economy, which is greater than Orszag himself says is sustainable.[5]
The actual deficit for fiscal year 2009, which ended Sept. 30, was higher $1.4 trillion, or 10 percent measured against the size of the economy ''' because it was boosted by tax cuts and initial spending from the president'''s $787 billion two-year stimulus plan. In his address, which he titled '''Rescue, Recovery and Reining in the Deficit,''' Mr. Orszag said the steps taken by the administration and Congress had mitigated '''the depth and duration of the recession,''' countering Republicans''' criticism that the stimulus money was wasted. The costs of that relief, he added, would account for '''just 10 percent of the entire deficit over the next decade.'''[4] The speech was made exactly one year before the midterm elections and as many vulnerable centrist Democrats fear voters will respond to the poor economy on Election Day 2010. It also comes after a year of deficit spending, most notably a $787 billion stimulus package that attracted the support of only three Republicans in Congress, and as Democrats are looking to pass a nearly $1 trillion healthcare reform package that they say will be paid for. More than half of Americans now say they disapprove of the way Obama has handled the federal deficit, and 48 percent disapprove of the way he has handled the economy, according to a Washington Post/ABC News poll taken last month. Orszag didn'''t describe deficit-reducing options under consideration, such as tax increases or spending cuts. He warned that the projected deficits are '''serious and ultimately unsustainable.'''[1]
Does the Obama administration ever plan to balance the budget? Apparently not. In a speech at New York University, Peter Orszag, head of the Office of Management and Budget, suggested that the administration'''s goal was to reduce the deficit to a '''fiscally sustainable level,''' which he said is '''roughly 3 percent''' of gross domestic product (GDP). That would be much lower than the deficit of $1.4 trillion for fiscal 2009, which ended in September and totaled $1.4 trillion. It would still be a lot of money, about $420 billion annually in today'''s dollars. The idea behind keeping the deficit to a '''fiscally sustainable level''' is to stabilize the outstanding federal debt as a share of GDP. In 2008, the federal debt held by the public was $5.8 trillion, or 41 percent of GDP. When the Congressional Budget Office estimated the prospective Obama budgets in June, it projected that there would be continuous deficits for the next decade and that by 2019 the federal debt would reach $17.1 trillion, about 82 percent of estimated GDP. Other estimates have put the debt-to-GDP ratio even higher. The annual deficits during this decade would average more than 5 percent of GDP, the CBO said. (The federal debt represents all the money borrowed to cover annual deficits.) In his speech, Orszag conceded that present deficit projections are '''well above''' fiscally sustainable levels.[6] Budget director Peter Orszag addressed that item in a speech, and Oval colleague Rich Wolf has the details. The 2011 budget President Obama submits in February will include "a number of proposals" to cut the $1.4 trillion federal deficit, his top budget aide says. In a speech delivered this morning at New York University, Office of Management and Budget director Peter Orszag offers few clues about the administration's deficit-cutting proposals. He makes it clear they will be a priority.[3]
President Obama'''s budget director said in a speech on Tuesday that the White House economic team is considering '''a range of options''' so the president can keep his promise to reduce federal budget deficits by the end of his term to half of the level he inherited. His address at New York University was the latest of several recent speeches by top-ranking officials intended to underscore Mr. Obama'''s concern about deficits that are projected to total $9 trillion over the coming decade, even as he and Congress for now are adding to it with further economic stimulus measures.[4] Speaking at New York University today, White House Budget Director Peter Orszag said that 'a significant coalition within the Congress' is building for action to reduce long-term annual budget deficits after health care is completed.[7]
First rule of holes: When in one, stop digging. Democrats increasingly have embraced that adage it comes to the federal budget deficit. For weeks, their worries about deepening the deficit have limited nearly everything they do in Congress, from health care to economic recovery to Afghanistan troop increases. Now ' cautiously ' White House officials and congressional leaders also are beginning to think about how to fill in the budget hole, or at least the one they face a few years down the road, when baby-boomer retirements begin in earnest and entitlement spending accelerates rapidly. (Short-term deficits worry people less, despite their enormity, because they're propping up the stricken economy.)[7] "Faced with anxiety in financial markets about the huge federal deficit and the potential for it to become an electoral liability for Democrats, the White House and Congressional leaders are weighing options for narrowing the gap, including a bipartisan commission that could force tax increases and spending cuts." Those elections have a stubborn habit of forcing even drunken sailor politicians to pretend to care about other people's money they otherwise have an unlimited appetite for squandering. Wait; I thought concern about runaway federal spending was the concern only of those "tea party" protestors the administration has dubbed "potential domestic terrorists" who were carrying "political paraphernalia" -- copies of the U.S. Constitution -- and engaging in "right-wing extremist chatter" focused "on the economy."[8]
Both the Fed. budget deficit and national debt in the Obama administration have increased by at least 15% over the previous Bush administration, as a result of over a trillion dollar worth on Wall st bailout, stimulus spending, mortgage assistance, etc. What is to be followed is the increase in tax to middle and upper class people to fund the health care bill and the cap and trade bill. and the cut in medicare benefit as well as increased government beureaucray.[6] Orszag blamed past policies for the country's fiscal woes. Nearly $5 trillion of the $9 trillion in deficits projected over the coming decade are the result of failing to pay for the 2001 and 2003 tax cuts and the creation of a Medicare prescription drug benefit, he said. He said "roughly $3.5 trillion can be attributed to automatic economic stabilizers," or spending programs such as unemployment insurance and food stamps, that automatically increase. The fiscal stimulus program, known as the Recovery Act, accounts for just 10% of the entire deficit over the next decade, he said. "All told, the entire $9 trillion deficit reflects the failure to pay for policies in the past and the cost of the worst economic downturn since the Great Depression and the steps we had to take to combat it," he said. "It was the result of decisionsconscious, but unfortunateand it will take deliberate action for us to work our way out of this situation."[9] Orszag pinned much of the blame for economic woes on the previous administration. He argued that Obama inherited a nearly $5 trillion projected deficit because the Bush administration failed to pay for the 2001 and 2003 tax cuts and the Medicare prescription drug benefit. An additional $3.5 trillion in the deficit can be attributed to "automatic economic stabilizers" such as unemployment insurance and food stamps, Orszag said. The Recovery Act represents 10 percent of the deficit, "despite what you may have heard to the contrary," he said.[10] The Obama administration has blamed its predecessor for creating huge deficits. Orszag said Tuesday that $5 trillion of the increased red ink over the next 10 years is the result of tax cuts and the Medicare Part D prescription drug benefit, both of which were enacted under former President George W. Bush.[1]
In a speech casting most of the blame for deficits averaging almost $1 trillion a year over the next decade — unless action is taken — on tax cuts and a Medicare drug benefit enacted during Bush's tenure, budget director Peter Orszag said the country faces a "serious" and "unsustainable" deficit problem.[5]
WASHINGTON — President Barack Obama's top budget official promised Tuesday that the administration will try next year to wrestle the skyrocketing budget deficit under control to avoid higher interest rates and putting the health of the economy in jeopardy. It is an illustration of just how dire the nation's fiscal picture has become that a promise to cut the deficit in half by 2013 would produce a deficit about $200 billion higher than ever recorded by former President George W. Bush.[5] During a recovery, private investment will again pick up and compete with the federal government for capital. "It is at this point that we are likely to observe a rise in interest rates, an increase in borrowing from abroad, or some combination thereof due to the deficits," Orszag said. "And it is at that point that deficits will be putting the health of our economy in jeopardy rather than helping to mitigate the most severe economic downturn in more than 50 years, as they are now." Orszag said President Barack Obama's administration is looking at proposals to rein in deficits as it works on its fiscal 2011 budget request, to be released in February.[11]
White House Budget Director Peter Orszag said Obama and the administration'''s economic team are looking at '''a range of options''' to be included in the fiscal 2011 budget proposal that would address the record $1.4 billion deficit.[1] The White House is beginning to send strong signals that it recognizes the $1.4 trillion budget deficit is a looming political problem that needs to be addressed, even as President Obama reminds Americans that the country's fiscal crisis originated with the Bush administration and will not be resolved overnight.[12] The Obama administration reported a record U.S. budget deficit for last fiscal year of $1.4 trillion, or 10 percent of gross domestic product, after it moved to rescue the economy and some of the biggest U.S. banks from the worst recession in 70 years.[2] Orszag promised that Obama's budget submission next February will propose solutions to shrink the deficit to sustainable levels. At $650 billion, the 2013 deficit would equal almost 4 percent of the size of the economy, a major improvement from this year's $1.4 trillion deficit, which registered at 10 percent of gross domestic product.[5]
You heard correctly. The Dems, just a few short years ago, were savaging Bush, despite his dramatic progress in cutting the budget, because his annual deficit was at the astronomical figure of $248 billion -- less than 18 percent of Obama's intentionally inflated budget of $1.4 trillion this year -- and his projected 10-year deficits totaled $1.76 trillion, barely more than Obama's budget for this one current year and only a small fraction of Obama's planned cumulative 10-year deficit projections of between $9 trillion and $13 trillion.[8] No, we're supposed to believe the Democrats care about deficits again, the ones Obama is planning on expanding to between $9 trillion and $13 trillion over the next decade. We've seen this pattern of deception before. Democrats railed against President George W. Bush's deficits as if they would have curbed federal spending if they had been in power. (We happen to know the rest of that story, don't we?) When Bush fulfilled ahead of time his 2004 campaign promise of cutting the deficit in half in five years, Democrats mocked his achievement as a temporary blip. Democratic Rep. Carolyn Maloney, hands wringing, said: "Only a president with such a historically bad economic record would be this excited about a $248 billion deficit. Under his watch. record surpluses turned into record deficits as far as the eye can see." It gets even more amusing. The same Associated Press story that contained that quote reported that fueling this Democratic concern over the budget was the Congressional Budget Office projection that the deficit could total $1.76 trillion over the next decade.[8]
Republicans have hammered the administration for government spending levels, and public polling for the first time is showing that the American public is losing confidence in the president's handling of the economic crisis. That shift occurred in the middle of last month, when a range of public surveys showed that more people (46.9 percent) disapproved of the president's handling of the economy than approved of it (45 percent), according to the Web site Pollster.com. "They're using language which comes from polling and focus groups about the concern, but the substance of their action is just the opposite of their language," said Sen. Judd Gregg of New Hampshire, the ranking Republican on the Senate Budget Committee. "The simple fact is they are in the process of growing this government at a rate that it has never been grown before." Mr. Gregg, who was chosen by Mr. Obama to be secretary of commerce until he abruptly withdrew before being confirmed, said the Obama administration "believes that an expanded, growing government creates prosperity. That's the European model."[12]
Mr. Orszag's speech on "reining in the deficit" will be the first time that a top White House economist will look forward at the difficult task of reducing the gap between government revenues and expenditures. Anxiety about the deficit has fueled the anger of the conservative "tea party" activists, riled by government spending and debt, and it has seeded reservations about the long-term price tags of signature items on the president's agenda such as health care reform and climate change legislation.[12] The president's budget director, Peter R. Orszag, on Tuesday will deliver the second major speech on the deficit in a week by a top White House official.[12] White House Budget Director Peter Orszag warned Tuesday that large federal deficits will eventually imperil the U.S. economy because they will lead to higher interest rates and more borrowing from overseas.[11] Current projections show $9 tril in budget deficits over the next 10 years, averaging about 5% of GDP, said White House budget chief Peter Orszag. "Deficits of this size are serious and ultimately unsustainable," he said, adding that interest rates could rise unless action is taken. He reiterated a vow to halve the deficit by Jan[13] NEW YORK (Reuters) - Projected U.S. budget deficits are too high and could force up interest rates and crowd out investments unless the country takes action, the White House budget chief said on Tuesday.[2] NEW YORK (Dow Jones)--Attention is shifting in Congress toward bringing down the U.S. government's potentially massive long-run fiscal deficits, an issue that will become a priority once a sweeping health-care reform bill is passed, the White House's chief budget management official said Tuesday. "I am seeing, both.[14]
The White House vowed Tuesday to tackle the nation'''s record deficit next year amid new polling that suggests more Americans think President Barack Obama has handled the economy poorly.[1] Without providing much in the way of specifics, White House Budget Director Peter Orszag Tuesday said the Obama administration is currently mulling several measures to put the economy on a sustainable, fiscal path.[9]
Orszag, however, did not specify what the proposals were. He repeated the White House's vow to cut the deficit it inherited in half by the end of Obama's first term.[11]
In using 2009 deficit figures as the yardstick, the White House is starting from a deficit "baseline" inflated by about $250 billion in spending for the Wall St. bailout. The 2009 deficit also reached such heights because of the recession, which caused plummeting revenues and increases for benefit programs such as food stamps and unemployment compensation.[5] "Nearly $5 trillion of the $9 trillion in deficits projected over the coming decade are the result of failing to pay for the 2001 and 2003 tax cuts and the creation of a Medicare prescription drug benefit, he said. He said 'roughly $3.5 trillion can be attributed to automatic economic stabilizers,' or spending programs such as unemployment insurance and food stamps, that automatically increase."[9] Under the latest administration estimates, the government would run a $775 billion deficit in 2013, the target year for Orszag's promise, meaning that about $125 billion in spending cuts or tax increases would be needed to trim that year's deficit to the promised level.[5] Orszag noted the administration is working to overhaul the nation's health care system and federal contracting. Curtailing the number of no-bid contracts could save about $40 billion a year, he said. He also noted the administration has proposed "pay-as-you-go" or PAYGO legislation that would require that any new tax cut or entitlement program be fully paid for. "These are all important steps to reining in waste and creating a government that uses taxpayer dollars more effectively and efficiently," he said.[9]
"Now, assigning blame never solves a problem, but it is important to understand that we didn't get where we are merely as a result of bad luck," Orszag said. "It was the result of decisions -- conscious, but unfortunate -- and it will take deliberate action for us to work our way out of this situation." Once the administration gets through health care reform, it will renew its focus on reducing the long-term deficit, which is expected to reach $9 trillion during the coming decade, the budget director added. Officials are considering a number of proposals to decrease that figure, he said, without offering specifics. "Deficits of this size are serious and ultimately unsustainable," he said.[10] A spokesman for Mr. Orszag said it would mean a deficit for fiscal year 2013, which begins Oct. 1, 2012, of about $650 billion, according to a spokesman for Mr. Orszag. That represents half of the $1.3 trillion deficit that the budget office estimated for this fiscal year when Mr. Obama took office in January.[4] Orszag defended the Obama administration's sweeping, $787 billion fiscal stimulus package as the right approach to the financial crisis and largely blamed the Bush administration and the recession for the current deficit. "The bottom line is that the administration and Congress did the right thing in forcefully responding to the current downturn: Mitigating the depth and duration of the recession will help to lessen the extent to which its effects reverberate in the years ahead," he said.[9]
Republicans used the growth of deficits to attack Democrats and the Obama administration as being fiscally irresponsible. They have also pointed to the rise in unemployment this year as evidence that stimulus spending isn't working.[11] The rest of the deficit spending stems from about $3.5 billion in increased spending on programs aimed at providing recession relief, including unemployment insurance and food stamps, and because of the $787 billion stimulus.[11]
Orszag said that deficit spending was necessary to help boost the economy when unemployment is hovering around 10 percent. He said that red ink must be stopped as the economy recovers.[11] Even with the economy showing signs of life, national unemployment, considered a lagging indicator of an economic recovery, hovers around 10 percent. The budget director noted that the typical progression in a recovery is growth in productivity followed by an increase in hours worked by those already employed. The last step, he said, is the hiring of additional workers. Orszag said the country is now somewhere between the first and second stages of this process. "Far too many workers who would rather be earning a paycheck are forced to accept unemployment, and are worrying about how to pay their mortgage, keep their health insurance and continue to provide for their families while they try to find another job," he said.[10] Orszag on Tuesday credited the stimulus with helping break the "potential vicious recessionary cycle" that the economy faced as it began to contract. He also said that the stimulus was responsible for virtually all of the 3.5 percent annualized economic growth in the third quarter of this year. He noted a recovery in jobs is expected to lag behind GDP growth.[11]
"In other words, effectively all the growth in real GDP during the third quarter could be attributable -- either directly or indirectly -- to the Recovery Act," Orszag said. "To economists, these statistics may provide a small measure of optimism. Let's be clear: to the millions of Americans who remain out of work, these numbers are cold comfort." Last week, recipients of Recovery Act contracts, grants and loans reported to a federal Web site that they had created or saved 640,000 jobs through about $160 billion in stimulus spending.[10]
OMB Director Peter R. Orszag cited proposed federal acquisition reforms, which the administration has said will save $40 billion annually through the reduction of sole-source and high-risk contracts; the termination of funding for the F-22 fighter jet; and the passage of pay-as-you-go legislation, as movement in the right direction. "These are all-important steps to reining in waste and creating a government that uses taxpayer dollars more effectively and efficiently," Orszag said. "But these steps alone will not fill the shortfall that we face.[10]
Obama's stimulus bill added $185 billion. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a group that advocates for fiscal responsibility, praised the administration for sending a signal "that this is going to be a serious budget."[5]
I nearly fell out of my chair as I read this New York Times headline: "Democrats Push for Plan to Cut Deficit." From the headline alone, I couldn't tell whether this was before, during or after they supported President Barack Obama's intentional, exponential escalation of the deficit to $1.4 trillion.[8] Orszag, in a speech in New York, said that deficits, expected to add $9 trillion to the current national debt of $12 trillion over the next decade, are "serious and ultimately unsustainable."[11] Orszag talked broadly about the need to reduce the deficit during a speech in New York, offering reassuring words on the topic without concrete proposals.[1]
From California to Michigan to New York, liberals have killed those state economies.And, since Jan. 2007, they have been destroying the American economy. It's no coincidence that a year after the liberals took control of the law making body of the U.S. government, that the economy has been going down hill.So, for Orzag to blame Bush for his and his fellow far left wing's plans for explosive, irresponsible deficit spending is pathetic. America has rejected Obamanomics this evening.[1]
All the attention being paid to the deficit isn'''t likely to result in sustainable deficits for years, at least not while the high jobless rate persists, budget experts said. '''Orszag knows that the economy will still be in bad shape, so he can'''t be pushing any big-time budget cuts or tax increases,''' said Dean Baker, co-director of the Center for Economic and Policy Research, a left-leaning economic think tank.[1] Orszag gave no hint of how the administration might close future deficits'''whether through spending cuts or tax increases and of what type. Nor did he explain why keeping the deficits to '''fiscally sustainable''' levels was superior to balancing the budget, though it would certainly be easier politically. It not clear whether Orszag'''s goal of deficit reduction would actually be adequate to stabilize the debt-to-GDP ratio.[6] We as a country is spending more then the rest of countries defense budget combined atleast most of the developing and western countries. No more bailouts of banks and investment companies let them fall. Close all offshore accounts or tax these companies heavliy. All these can be done within a year and cut our deficit to half in one year.[4]
Jadefellow - private investment will come back…the highest tax rate is 36%…if it goes to 39%, that will be what it was in the 1990's when the Republican congress and the Democratic white house raised taxes, cut spending, and ballanced the budget…4 times.[11] Get ready for the GOP to take back Congress in 2010 and the White House in 2012. It is great news to know that people are starting to wake up and reject the tax and spend and power grabs of the Obama andminstration and the regressives (they call themselves "progressives", what a laugh!) who have taken control of the Democratic Party through lies to the American people. The only thing the democrats know how to do well is to spend other peoples money, i did forget they also know how to look in the eyes of the american citizens and flat out lie to them about everything. The only transperancies that is going on is that the american people are starting to see right thru their lies. I will not rest until this ideology is out of power. No one should ever misuse the trust of the american people as Obama did in getting elected. we will correct this in the next 2 elections.[1]
The White House projects deficits of $1.5 trillion in 2010 and $1.1 trillion the year after.[1] Under White House budget office calculations, the deficit goal for 2013 is about $650 billion.[5]
Baker suggested the White House'''s recent remarks about the dire fiscal situation are an attempt to '''dress up''' deficit reductions in 2011 as '''serious deficit-cutting moves.'''[1]
The White House has projected that the unemployment rate will average 9.1 percent next year.[1]
President Obama gave his views and input on the unemployment situation, only reminding U.S. citizens that it is clearly not improving and will inevitably get worse before it gets better! The president informed U.S. citizens that him and his administrations main goal is to create long term jobs in the U.S. in order to relieve the unemployment rate and better stimulate the economy. Unfortunately, despite what Mr. President would like to see happen, the creation of these jobs is going to be extremely difficult with the current standings of the economy. Obama said that unemployment was at exactly 9.8%, although this number feels altered based on the harsh circumstances each state is experiencing, the National Average is approximately 10% as Obama stated.[15] Orszag warned the deficit issue is a pressing one because at some point, there could be a rise in interest rates or a boost in borrowing from abroad that puts the health of the U.S. economy in jeopardy.[9] With private borrowing depressed by the deep recession, today'''s huge deficits haven'''t pushed up interest rates, but when the economy revives '''the federal government'''s borrowing. will be competing more directly with private-sector borrowers''' and might increase interest rates.[6]
Yes it is less money I have to invest, but it is also money that can be used to prevent the government from borrowing, which means that private investment won't be competing with government for capital, which means interest rates will remain lower, which means it is cheaper for me to invest to make that $100,000…One big circle. As far as the stimulus package…I read this weekend.[11]
Like the rich have been taxed at all. Their wealth has grown by leaps and bounds since Ronald Reagan's days in office and their tax rates have been cut by a third. The middle class has been raped by the wealthy: They've seen nada appreciable tax cuts, their jobs shipped off to China by the very Wall Street Fat Cats who are looting the government coffers with corporate welfare deals aka "contracts", their pensions have been converted to non-dependable 401K's, their health care costs have sky-rocketed, their salaries have stagnated, and their debts climbed.[4] Oh, and cue the chorus of moron republican commentators. Is it okay to attack the Bush Administration for running up a big spending bill that we can'''t afford to pay? Fine, by me! Might the Obama Administration have come into office with the idea to reduce the debt? Excellent idea! Or, perhaps they could go in the opposite direction and plan to make America better by passing some sort of health care package, despite the fact that it will make the debt even bigger.[4]
Mr. Orszag has been the Obama economic team'''s foremost proponent of the argument that the president'''s health care initiative eventually would constrain the rising costs that are driving projections of unsustainable deficits in years ahead, particularly for Medicare and Medicaid. He predicted that Congress will pass legislation soon, but he reiterated that the president will sign it into law only if it '''will not add to the deficit over the next decade and will reduce deficits thereafter.'''[4] Administration officials said Mr. Orszag's speech is a recognition that the deficit will continue to be a challenge and an issue of concern even if health care reform is passed and will need additional treatment beyond "bending the curve" of health care costs.[12] The speech was intended to send a signal that after the ongoing health care overhaul debate, the administration is determined to try to take on the deficit — hardly an easy task in a midterm election year.[5]
A speech last week by Christina D. Romer, chairman of the president's Council of Economic Advisers, looked at the reasons for the deficit and at how it relates to health care reform.[12] I think we all know the answer'''higher taxes. What is incredulous is that they are discussing it in the midst of the Health Care Reform bill debate, and how much that will cost! So, how'''HOW, may I ask, do these folks think they can actually reduce the deficit AFTER passing sweeping (and costly) health care legislation? To discuss the two, simultaneously, is the political and economic equivalent to schizophrenia.[4]
"All told, the entire $9 trillion deficit reflects the failure to pay for policies in the past and the cost of the worst economic downturn since the Great Depression and the steps we had to take to combat it," Orszag said.[11] Orszag said $5 trillion of the expected $9 trillion in red ink over the next 10 years is the result of tax cuts and the Medicare Part D prescription drug benefit.[11] Obama has proposed extending the tax cuts for Americans making less than $200,000 but allowing the cuts for wealthier Americans to expire.[11]
Orszag said the administration would propose to cut the deficit inherited by Obama in half by 2013.[5] Orszag said the administration is "working on a range of options" to improve efficiency and trim the deficit as it prepares to release the fiscal 2011 budget in February.[10] Improvements in the economy have made way for the administration to consider tough, new budget decisions, Orszag said. He added: "None of this will be easy." Speaking at New York University, Orszag said the economy seems to be recovering, but he expects the labor market to remain weak in the coming months.[9] NEW YORK -- The Obama administration has undertaken a litany of legislative and economic policy reforms to "change the culture in Washington" and to improve how the government spends taxpayer dollars, the head of the Office of Management and Budget said Tuesday during a speech at New York University.[10]
When asked why the administration is publicly voicing worry about the debt, Sen. Judd Gregg (R-N.H.) said Democrats are concerned about polls. Gregg, the top Republican on the Senate Budget Committee, said the Obama administration is saying the right things but the president and Democrats in Congress have yet to act on those words. '''I think it'''s been poll-tested and focused and developed, but the substance of their actions is just the opposite,''' he said.[1] Bayh said the special process should be considered during debate over an increase in the $12.1 trillion debt limit, which must be approved by the upper chamber within weeks. Sen. Kent Conrad (D-N.D.), the Senate Budget Committee chairman, and Gregg plan to hold a hearing Tuesday on their proposal for a bipartisan fiscal task force.[1] How much action will really result is still anyone's guess. The Senate Budget Committee said today it will hold a hearing next week on several proposals, such as a bipartisan commission, to deal with long-term deficits.[7]
"We are currently considering a number of proposals to put our country back on firm fiscal footing, and to cut the deficit we inherited in half by the end of the president's first term."[9] Given that President Obama has only an inclination to spend, i see no reason to believe they can cut the deficit.[4]
I, and many other observant individuals, do realize that Barack Obama is amassing a national deficit which eclipses the total deficits accumulated by all U.S. presidents previously. Now, that is the empty suit's only pathetically realized accomplishment.[6]
Great article, puts things in some perspective. With the increasing control being exerted by this Administration and Congress I question if private investment is going to be willing to take on risk. If aditional taxes are a vehicle to reduce the deficit, the return on investment will be reduced by investing in this countries economy and smart money will flow to the areas that provide the highest after tax return. This Administration is simply barking up the counterproducti ve tree. If how Oregon utilized it's stimulus is an indication of how other states are applying the funds the stimulus will indeed be a failure of epic portions. [11] "To bring deficits down to a sustainable range. will require more action once the economy is into a recovery," Orszag says.[3] Orszag didn'''t say when the administration would start curbing the deficits, except to indicate that the process might start once the economic recovery seemed well established. At that point, large deficits'''rather than stimulating the economy'''might do the opposite, he said.[6] Orszag blamed the expected growth in debt on the recession and the economic policies of former President George W. Bush's administration.[11] Orszag was somewhat more optimistic about the short-term fiscal outlook, crediting economic growth in the third quarter of 2009 to the effects of the $787 billion Recovery Act. He noted that recent estimates indicate the Recovery Act added 3 to 4 percentage points to economic activity in the third quarter, which ended Sept. 30.[10]
"As the economy recovers, we must pull together — as a nation — and make the tough decisions to put our country back on a solid fiscal foundation," Orszag said. "None of this will be easy. It took us years to dig ourselves into the current fiscal hole.[5] A former visiting scholar at NYU, Orszag spoke to a nearly packed house of several hundred people for less than one hour on the causes of the recession, the current state of the economy and the long-term fiscal picture.[10]
While unemployment rises, the government is being forced to pay more and more people unemployment benefits, thus creating more and more debt and no stimulation of the economy.[15]
After grinding us into dust for 7 more years, then the survivors will simply owe another $9 trillion on top of the $100 trillion of current federal liabilities. This is all a fantasy, as there is very little chance the American people will not figure out soon that their government is in its terminal phase now, just like the Soviet Union Collapsed 20 years ago.[4] Interesting, but if Obama thought the problems caused by Bush were so insurmountable that Obama could not deal with them, maybe he should have leveled with the American people last year. It's a good thing Obama never served in Congress or we would have thought he might have participated in at least some of the debates of the last four years of the Bush administration.[4] And, it will take years for us to get out." It's not clear how much sacrifice the administration will call for, but the steps are sure to be painful and are virtually certain to force Obama to abandon his promise to not raise taxes on families making less than $250,000.[5]
House leaders for now are focused on using next year's annual budget resolution to establish targets or guidelines for long-term deficit reduction. That seems to promise less dramatic impacts, at least in the short run. That could be important to House Democrats, whose majority will be on the line in next year's election. House Democrats might be more worried about digging themselves a political hole than they are about filling in the budget hole. [7] To do that, the economy would have to grow at 3 percent or more a year in the future'''possible, but not guaranteed'''and the debt-to-GDP ratio would have to decline in some years, because future recessions and emergencies almost inevitably bloat deficits and require more borrowing.[6] The deficit should shrink over the next two years as stimulus spending slows down, Baker said.[1]
Drastically cut the defense spending budget which consumes billions of our tax dollars and closely monitor any spending programs currently in the works.[4] Pelosi and Reid will not agree to spending cuts and the Republicans are not going to agree to any tax increases.[4]
Orszag himself acknowledged that unemployment will be a problem for months. '''The typical progression in a recovery is first an increase in productivity, then an increase in hours worked, and finally, the hiring of additional workers by firms,''' he said. '''We are somewhere between the first and second stages of this process.''' [1] Mr. Orszag's speech will not contain any new proposals or policy solutions, but will attempt to lay a foundation for the conversations to come next year.[12] Real Time Economics offers exclusive news, analysis and commentary on the economy, Federal Reserve policy and economics.[9] A new blog from The New York Times that tracks the health care debate as it unfolds.[4]
Yeah, like I pity the poor rich. I say we EAT the rich! The rich have looted this country for the past 30 years and it's at their doorstep the blame can be laid for the erosion of what's left of the middle class. It's time the middle class fights back and raises tax rates on the rich.[4] Obama and his team do not have the backbone to stand up to the "tax and spend" crowd, so the country will have to go through a period of "Jimmy Carter" inflation in-order to get the deficit problems addressed.[4]
The enactment of a bipartisan process to reduce the deficit isn'''t likely to come soon, either, said Jim Horney, federal fiscal policy director at the Center on Budget and Policy Priorities.[1] Treasury Secretary Timothy F. Geithner appeared on NBC's "Meet the Press" on Sunday to make clear that the administration recognizes the deficit is growing too large. "Well, it's going to have to come down. Now it's too high, and I think everybody understands this," Mr. Geithner said. "The president's very committed to bring down these deficits."[12] I wonder if these guys remember that there were Democrats in Congress, and that Ted Kennedy supported the prescription drug benefit. I wonder if these guys think the seeds of the economic downturn were not found in both political parties, who supported Fannie and Freddie and giving mortgages to the poor, and thought it was a good idea to repeal Glass Steagall during the Clinton Administration.[4]
SOURCES
1. Orszag turns to deficit fear - TheHill.com
2. Projected U.S. deficits unsustainable: White House | Politics | Reuters
3. Obama budget director: We can cut the deficit - The Oval: Tracking the Obama presidency
4. Orszag: To Reduce Deficit, 'Range of Options' Being Considered - The Caucus Blog - NYTimes.com
5. The Associated Press: Obama budget dir. pledges deficit action next year
6. Orszag: Forget About Balancing the Budget - The Gaggle Blog - Newsweek.com
7. The Hole Story: Democrats Begin Thinking About Long-Term Deficits - Washington Wire - WSJ
8. David Limbaugh : Democratic Deficit Duplicity - Townhall.com
9. Orszag: Administration Looking at Ways to Cut Deficit - Real Time Economics - WSJ
10. Budget chief says administration is 'changing the culture in Washington' (11/3/09) -- GovExec.com
11. OMB director warns growing deficit a threat to American economy - TheHill.com
12. W.H., Dems sound alarm on budget deficit - Washington Times
13. Investors.com - Orszag: Deficits unsustainable
14. OMB Orszag: Congress Attention Shifting To Long-Term Deficits - WSJ.com
15. Obama Sees Unemployment Rising to Over 10%; New Job Creation a Struggle : Subprime Blogger
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