CBO Chief: "The Outlook For The Federal Budget Is Bleak"

Published December 23, 2015

A day after the White House announced it would seek a three-year freeze in "non-security" spending, the head of the non-partisan Congressional Budget Office called the move a "small step" toward fiscal discipline.

CBO Director Doug Elmendorf also released his agency's 10-year budget projections, which include a deficit for this fiscal year of $1.3 trillion or 9.2% of the nation's gross domestic product (GDP).

The CBO also projects 10-year federal deficits under current law will exceed $6 trillion.

"In sum, the outlook for federal budget is bleak," Elmendorf said.

This year's deficit is only slightly smaller than last year's shortfall of $1.4 trillion. The 2009 deficit was the largest as a percentage of GDP (9.9%) since World War II. This year's deficit will be the second largest as a percentage of GDP.

The White House says its three-year freeze on non-security discretionary spending would save $250 billion over 10 years. Elmendorf said it could not validate these projections, but called the savings a "small share" of future spending.

"It's a step in the right direction, but a small step," Elmendorf said.

Obama will use his State of the Union address to propose a spending freeze of $447 billion on "non-security" spending. It would also exempt entitlements such as Social Security, Medicare, and Medicaid. Security spending that would not be touched by the freeze would include Afghan and Iraq wars spending as well as all other spending for the Pentagon, veterans benefits, homeland security and foreign aid.

During the 2008 campaign, Obama criticized spending freezes as a blunt instrument to impose fiscal discipline.

"I think that's a way of punting responsibility, " Obama said of an across-the-board "non-security" spending freeze on Sept. 28, 2008. "The president has to make choices. And those choices mean that when you deal with the budget, you don't take an ax to it; you use a scalpel.

"I disagree with Senator McCain about an across-the- board freeze," Obama said during the Oct. 7, 2008 presidential debate with GOP nominee John McCain, who had suggested a spending freeze on spending outside of entitlements and defense spending. "That's an example of an unfair burden sharing. That's using a hatchet to cut the federal budget."

On Oct. 15, 2008, Obama said this: "An across-the-board spending freeze is a hatchet, and we do need a scalpel," Obama said on Oct. 15, 2008.

White House Press Secretary Robert Gibbs told Fox today that Obama will still wield a "scapel" because he will make choices on which agencies will receive more money and which will lose it under his overall freeze.

"It takes into account important investments, so it's a scapel," Gibbs said.

URL

https://www.foxnews.com/politics/cbo-chief-the-outlook-for-the-federal-budget-is-bleak