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CBO: Four Straight Trillion-Dollar Deficits, Economic Pain Today, Debt Crisis Ahead

Ryan Challenges President and Senate Democrats to Wake Up to Alarm Bells

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Washington – Earlier today, the Congressional Budget Office (CBO) released its annual Budget and Economic Outlook, projecting that the federal government’s budget deficit will exceed $1 trillion for the fourth year in a row. With the national debt on pace to grow to unsustainable levels in the years ahead, the CBO estimates that economic growth will remain sluggish and the unemployment rate will exceed 9 percent next year.

In response to this alarming report from the CBO, House Budget Committee Chairman Paul Ryan of Wisconsin issued the following statement:

“This report from the Congressional Budget Office serves as a harsh indictment of President Obama’s failed policies. With four straight years of trillion-dollar deficits, no credible plan to lift the crushing burden of debt, and a Senate Majority that has failed to pass a budget for over 1,000 days, the President and his party’s leaders have fallen short in their duty to tackle our generation’s most pressing fiscal and economic challenges. By contrast, the new House Majority has fought to put the brakes on the President’s spending spree and continues to advance pro-growth solutions to get our budget on the path to balance and our economy on the path to prosperity.

“I remain committed to building a bipartisan coalition for a principled reform agenda, and I invite the President and Senate Democrats to join our effort. The CBO’s latest alarm bell couldn’t be more ominous. For years, politicians from both political parties have failed to be honest with the American people about the size and scope of the debt threat. The CBO’s report today confirms that it is past time for serious leaders to put aside politics and start forging solutions.”

Key facts from the CBO’s Budget and Economic Outlook:

  • Real economic growth is projected to be to 2.2 percent in 2012, falling to 1.0 percent in 2013;

  • The unemployment rate is expected to reach 8.8 percent in 2012, 9.1 percent in 2013, and 8.7 percent in 2014;

  • The FY2012 budget deficit is projected to equal $1.079 trillion, the fourth consecutive year with the budget deficit above $1 trillion;

  • Total debt is projected to reach $16 trillion in 2012, with debt held by the public to eclipse the $11 trillion mark in 2012 (72.5% of GDP);

  • Debt held by the public is projected to reach $15.3 trillion by 2022.

Table 1: CBO's 'Current-Law' Projections of Spending, Revenues, and Deficits, 2012-2022
In Billions of Dollars
 

  2012  

  2013  

  2014 

  2015  

  2016  

  2017  

  2018  

  2019 

  2020  

  2021  

  2022  

  2013 - 2022  

Revenues

 2,523

 2,988

 3,313

 3,568

 3,784

 4,039

 4,243

 4,456

 4,680

 4,926

 5,181

 41,179

Outlays

 3,601

 3,573

 3,658

 3,836

 4,086

 4,259

 4,439

 4,714

 4,960

 5,205

 5,520

 44,251

Deficits

 -1,079

 -585

 -345

 -269

 -302

 -220

 -196

 -258

 -280

 -279

 -339

 -3,072

Debt Held by the Public

 11,242

 11,945

 12,401

 12,783

 13,188

 13,509

 13,801

 14,148

 14,512

 14,872

 15,291

 N/A

                         
As a Percentage of Gross Domestic Product (GDP)
Revenues

 16.3

 18.8

 20.0

 20.2

 20.2

 20.5

 20.5

 20.6

 20.7

 20.9

 21.0

 20.4

Outlays

 23.2

 22.5

 22.1

 21.8

 21.8

 21.6

 21.5

 21.8

 21.9

 22.0

 22.4

 21.9

Deficits

 -7.0

 -3.7

 -2.1

 -1.5

 -1.6

 -1.1

 -0.9

 -1.2

 -1.2

 -1.2

 -1.4

 -1.5

Debt Held by the Public

 72.5

 75.1

 74.8

 72.6

 70.5

 68.5

 66.8

 65.5

 64.2

 63.0

 62.0

 N/A

Source: Congressional Budget Office: The Budget and Economic Outlook



Table 2: CBO Economic Assumptions
 

 Forecast

 Projected Annual Average
 

     2012    

      2013    

 2014-2017

 2018-2022

(percentage change, year to year)
Real GDP

 2.2

 1.0

 4.0

 2.5

Consumer Price Index

 1.7

 1.5

 1.8

 2.3

(calendar year average)
Unemployment Rate

 8.8

 9.1

 7.0

 5.4

Three Month Treasury Bills

 0.1

 0.1

 2.0

 3.7

10-Year Treasury Notes

 2.3

 2.5

 3.8

 5.0

To read the full CBO Budget and Economic Outlook: http://cbo.gov/doc.cfm?index=12699 

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