Obama Budget Reduces Deficit by $1.3 Trillion over Next Decade Compared to Current Policies

Obama Budget Reduces Deficit by $1.3 Trillion over Next Decade Compared to Current Policies
But Much More Action Will Be Needed

By Kathy Ruffing and James R. Horney

Despite claims that President Obama's policies will generate big increases in deficits, his 2011 budget would actually reduce deficits by about $1.3 trillion over ten years, based on a Congressional Budget Office estimate of his budget and a realistic assessment of what deficits would be if policymakers continued to follow current tax and spending policies. Despite this deficit reduction, the President's budget does not do enough to put the nation's finances on a sound footing, as the President himself acknowledges.

Even if Congress enacted his budget in full, the federal government would still generate huge and ultimately unsustainable deficits in coming decades, risking serious damage to the economy. Consequently, policymakers will have to reduce annual deficits to about 3 percent of GDP in the second half of this decade.

View the full report:
http://www.cbpp.org/cms/index.cfm?fa=view&id=3143
http://www.cbpp.org/files/4-5-10bud.pdf 6pp.