July 22, 2014

CBO Sees $6.6 Trillion in Deficits Under Obama Plan

  • The national debt has grown significantly in recent years due to rising annual deficits. A deficit occurs in any year the government spends more...

The Congressional Budget Office (CBO) recently projected that federal deficits under President Obama’s budget plan would total $6.6 trillion in the coming decade, a trillion dollars less than under current law.

Under the President’s policies, CBO said, deficits this year and next would be about $500 billion and then generally increase to as high as $800 billion by 2024.

These deficits would represent about 3 percent of GDP throughout the decade. Nor would there be much change in the debt relative to GDP; in other words, for another decade not much would be done to put the debt on a downward path.

In addition, interest costs would continue to rise steeply, reaching $838 billion by 2024 -- not much below CBO’s current-law projection of $876 billion.

Projected deficits under Obama’s plan would exceed those under current law through 2016. For the rest of the 10-year period, they would be smaller than under current law.

CBO said Obama’s proposed policy changes would increase revenues by about 3 percent over the coming decade relative to current law. They would boost spending by about 1 percent.

CBO said its estimates of budget deficits under the President’s plan were lower than the administration’s own estimates for this year and next, but higher between 2016 and 2024.