http://www.bloomberg.com/apps/news?pid=20601087&sid=aVDEHvI9WH_Q

Obama Budget Plan Underestimates Deficits, CBO Says (Update1)
Share Business ExchangeTwitterFacebook| Email | Print | A A A By Brian
Faler

March 5 (Bloomberg) -- President Barack ObamaÆs budget proposal would
generate bigger deficits than advertised every year of the next decade,
with the shortfalls totaling $1.2 trillion more than the administration estimated, according to the Congressional Budget Office.

The nonpartisan agency said today the deficit will remain above 4
percent of the nationÆs gross domestic product for the foreseeable
future while the publicly held debt will zoom to $20.3 trillion,
amounting to 90 percent of GDP by 2020. By then, interest payments on
the debt will have quadrupled to more than $900 billion annually, the
report said.

Deficits between 2011 and 2020 would total $9.76 trillion, the CBO said.

Economists generally consider deficits topping 3 percent of GDP to be unsustainable because that means government debt is growing faster than
the ability to pay back the money.

ôThe news today from CBO is clear: The presidentÆs budget will continue
to lead our nation into a fiscal catastrophe -- an ever worse one than
the presidentÆs own numbers suggest,ö said Representative Paul Ryan of Wisconsin, the top Republican on the House Budget Committee.

White House Office of Management and Budget spokesman Kenneth Baer said
the report ôhighlights how sensitive and uncertain budget projections
are.ö

Baer also said, ôWhat is certain is that the irresponsibility of the
past put the country on an unsustainable fiscal trajectory.ö

Independent View

The CBO report is designed to give Congress an independent assessment of
the administrationÆs budget request. The difference between the two
outlooks is largely attributable to varying economic assumptions that
affect projections of how quickly tax revenues will pour into the
Treasury.

Revenues will be about $2 trillion less than the administration
projects, while spending will be lower by about $600 billion, according
to the CBO report.

The administration projected last month the deficit would shrink to as
low as 3.6 percent of GDP, with the 10-year shortfall totaling $8.5
trillion. It foresees the debt growing to 77 percent of GDP in 2020.

The deficit for the 2010 fiscal year has been projected to be $1.6
trillion, a record. Obama last month established an 18- member
bipartisan panel to suggest to Congress steps that would reduce the shortfalls.

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net.

CMPQwk 1.42-21 9999
Stop the Democrat party oil embargo ....

--- PCBoard (R) v15.3/M 10
* Origin: (1:226/600)