CBO reports U.S. deficit spending is soaring

The nonpartisan Congressional Budget Office and the White House reported Tuesday that the U.S. federal deficit will soar to nearly $1.6 trillion this year, "miring the nation in the deepest pool of red ink since the end of World War II."

A Washington Post article by Lori Montgomery dated August 25, reports "the gap between spending and tax collections will amount to 11.2 percent of the overall economy, more than tripling last year's deficit of $459 billion," according to the CBO. The growing gap is the result of the severe economic downturn, the CBO said, which produced the sharpest drop in tax collections since the Great Depression and the biggest increase in spending since the Korean War. "Americans are deeply shaken -- and increasingly angered -- by the explosion of spending and debt coming from Washington," said Rep. Paul Ryan (R-Wisc.), the senior Republican on the House Budget Committee. "If we continue to pursue this policy of Washington as the answer to every problem, it will cost Americans far more than the obvious burdens of ever-higher taxes, interest rates, inflation, and debt; it will cost us the freedom to run our own lives." As president, Obama has called for maintaining some of the Bush policies that have fueled the deficit-- he would extend some of the Bush tax cuts beyond their 2010 expiration date, for example. But in light of the new deficit figures, White House budget director Peter Orszag hinted -- without offering details -- that Obama may revisit some of those decisions when he submits his next budget in February. "Whatever their cause, the administration is very concerned about those out-year deficit figures," Orszag said, "and getting those deficits under control is a top priority of this administration." According to the Post article, "the White House predicts that the nation will have to borrow an additional $9 trillion over the next decade to finance the annual deficits, driving the accumulated national debt to nearly $23 trillion in 2019 -- or 76.5 percent of gross domestic product, the highest since 1950."