Calvin Woodward fact checked Obama’s second presidential press conference and concluded Obama is trying to have it both ways on the economy — Obama asked for patience for the economy to turn around, but his budget is based on the bullish assumptions of solid growth next year after a mild, further decline this year:
- On How Long Recovery Will Take
THE FACTS: No one really knows when the recession will end. But Obama’s own budget forecasts the recession will continue through this year but with a relatively shallow 1.2 percent decline in the gross domestic product.
Then, the budget predicts solid 3.2 percent growth for 2010, followed by three years of more than 4 percent growth each year.
Christina Romer, head of the White House Council of Economic Advisers, said this week she was “incredibly confident” the U.S. economy will recover within a year.
Congressional Republicans and some Democratic budget hawks have suggested the Obama budget projections are unduly optimistic to make the math to pay for the president’s programs work. The higher the GDP growth, the more tax revenues come in.
Meanwhile, the nonpartisan Congressional Budget Office last week predicted that the Obama budget would produce deficits averaging nearly $1 trillion over the next decade.
We have discussed how Obama’s administration cooked the stimulus books with overly optimistic projections to get that boondoggle passed. Why should we expect better for Obama’s spend too much, tax too much, borrow too much budget?
- Obama’s Deficit
THE FACTS: Not all credible estimates foresee a deficit halved in that time.
Obama’s budget forecast a deficit of $530 billion by the end of 2013. That would cut by half the deficit he inherited at the start of his term. To succeed, Obama is counting on a recovered economy, a tax boost for the rich and success in easing foreign entanglements. But his assertion that he can accomplish that “even under the most pessimistic estimates” flies in the face of an answer he gave moments later.
The Congressional Budget Office forecasts that Obama’s spending plan would leave a deficit of $672 billion by the end of 2013. Explaining the differences between his projections and CBO’s, Obama said his administration projects a higher growth rate.
Obama projected a $1.75 trillion deficit so he could spend $4 trillion in his first budget. The Obama deficit is a hidden cost of Obama’s big government spending orgy intended to expand the size and role of government. Obama’s projected $1.75 trillion deficit will cost an additional interest on the national debt of $4.5 trillion over 10 years.
Obama cooked the budget books as well, underestimating Obama deficit. The Congressional Budget Office predicts President Obama’s budget will result in deficits of $9.3 trillion over 2010-2019 — $2.3 trillion more than estimated by the White House.
- Obama’s Economic Growth Assumptions
THE FACTS: The Obama administration’s economic growth projections are more optimistic over the next five years than those of the Blue Chip Consensus, a monthly average of 50 economic forecasts from the private sector.
The Blue Chip projection is for a deeper contraction this year than is foreseen by the administration – 1.9 percent versus 1.2 percent. Then it foresees growth of only 2.1 percent next year, instead of 3.2 percent, and less than 3 percent in each of the next three years, when the administration’s forecasts are for 4 percent or better.
After 2015, the blue chip forecast is a little brighter than the administration’s.
Financial experts quibbled over Obama’s rosy assumptions used to sell the stimulus. Why should we expect anything different for Obama’s budget?
- Bailingout Irresponsible Homeowners
THE FACTS: Even officials in his administration, many supporters of the plan in Congress and the Federal Reserve chairman have said some of the bailout money is bound to go to those who acted irresponsibly.
Fed Chairman Ben Bernanke has said it’s important for the nation to go ahead with the plan even though it means assistance will go to some who should have known better than to get in over their heads.
Sheila Bair, head of the Federal Deposit Insurance Corp., made a similar point when she said it’s “simply impractical” to examine every delinquent loan and weed out those taken by people who overstated their income or assets to get a mortgage they couldn’t afford.
Obama hasn’t been able to fool all the people on this prevarication. A Quinnipiac University poll found most Americans think Obama’s program to fight home foreclosures is unfair to those who pay their mortgages on time.
- Blaming President Bush
FACT: Obama inherited a whopper of a deficit, much of it due to policies and spending led by Republican President George W. Bush. But the Congress, which authorizes spending and is not blameless in driving up deficits, was controlled by Democrats in the last two years of Bush’s presidency.
I’m sure Obama and the Democrat-controlled Congress really hope they can get away with this whopper. Under the Constitution, it is Congress, not the President, that authorizes spending.
Obama is correct that he inherited a deficit. Nevertheless, when the Democrats regained control of Congress and made Nancy Pelosi the first female speaker of the House of Representatives on January 4, 2007, the national debt was only $8,670,596,242,973.04 — that’s $8.67 trillion. A week ago the national debt passed $11 trillion. In the 14 months that Pelosi and the Democrats have been in charge of the purse strings, the national debt has grown by 26.9 percent.