Who Gets the Blame for the Deep Deficit?
August 30, 2009
By JACKIE CALMES
nytimes.com
Last week, Congress and the White House released their summer budget updates, touching off a flurry of headlines and commentary suggesting President Obama’s agenda would produce deficits exceeding a total of $9 trillion over a decade. Others said $2 trillion. Both calculations were misleading.
While Mr. Obama has proposed nothing to reduce the nation’s red ink, he also has not deepened it — yet.
The analyses of the Congressional Budget Office and the administration’s Office of Management and Budget are not exactly comparable for technical reasons. Still, both agree that much of the $9 trillion through fiscal year 2019 is the government’s so-called baseline deficit — the shortfall that would result if current law and policies don’t change.
In effect, it is the deficit that Mr. Obama inherited — about $6.3 trillion by the administration’s calculation, $7.1 trillion by the Congressional office’s.
Some commentators apparently subtracted the Congressional office’s $7.1 trillion baseline deficit from the more than $9 trillion that both agencies say would result under Mr. Obama’s policies, and concluded the president would add at least $2 trillion to the decade’s debt. But so would any president, Democrat or Republican, since the amount reflects policy adjustments that are costly and almost certain, and that have bipartisan support.
Among the adjustments:
• Extending Bush tax cuts past their scheduled 2010 expiration (Mr. Obama, by letting those for the rich lapse, would reduce the revenue loss).
• Adjusting the alternative minimum tax for inflation to spare millions of Americans higher income taxes.
• Blocking cuts mandated for doctors’ Medicare reimbursements.
Those fixes, in turn, would mean hundreds of billions more in interest on the added debt.
As for Mr. Obama’s big-ticket proposals, notably health care and energy policy overhauls, those do not add to the deficits under the agencies’ analyses because he has proposed savings and tax increases to offset their costs.
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