White House predicts US debt will double in 10 years
The United States Office of Management and Budget (OMB) is predicting that the national debt of the US will double in 10 years. Meanwhile, the Congressional Budget Office (CBO) has raised its forecast of the 10-year cumulative budget deficit to US$7.137 trillion, due to increased spending. Both offices released reports on Tuesday.
“Over all, it underscores the dire fiscal situation that we inherited and the need for serious steps to put our nation back on a sustainable fiscal path,” wrote Peter R. Orszag, President Barack Obama’s budget director.
“I know that there will be some who say this report proves that we cannot afford health reform. I think that has it backward,” Orszag said in a conference call.
The CBO report predicts that public debt will exceed 61% of gross domestic product (GDP) by the end of 2010 while continuing to rise to 68% of GDP by the end of 2019.
“If anyone had any doubts that this burden on future generations is unsustainable, they’re gone,” said Senator Mitch McConnell, the Senate minority leader.
“Today’s budget numbers send a clear signal that the time for putting off tough choices is over and the time to act is now,” said the chairman of the Senate Budget Committee, Kent Conrad.
“While the U.S. health care system does need to be reformed, we cannot ignore the fiscal realities of our situation,” said Senator Judd Gregg who is also on the Senate Budget Committee. “We must proceed with extreme caution before putting in place a huge and costly new program that will threaten our economy and the future of our children.”
“The administration has always said that you have to get deficits under 3 percent of GDP to be safe. They now admit that they will not in the next 10 years,” commented Douglas Holtz-Eakin, a former director of the CBO. “I’m stunned at how hard they have worked to bury this.”