The federal deficit topped $1 trillion in the first 11 months of fiscal year 2012, according to the Congressional Budget Office, reaching $1.17 trillion, exceeding CBO’s August projections.
“CBO estimates that the Treasury Department will report a deficit of $1.17 trillion for the first 11 months of fiscal year 2012,” CBO said Monday.
CBO estimated that the government ran a $192 billion deficit during the month of August, up from the $70 billion deficit it ran in July.
In its updated projections, CBO estimated that the government will run a $1.13 trillion deficit in fiscal year 2012, which ends on Sept. 30 of this year. In order to hit that target, the government will actually have to run a surplus during September of $40 billion.
The government ran a $1.3 trillion deficit in fiscal year 2011, a figure the government could once again reach if its September deficit is as large as its August deficit.
I think it’s a safe bet that we’ll hit $1.3 trillion again for fiscal year 2012.
Here are the raw numbers from the non-partisan Congressional Budget Office, as reported by CNS News:
The Congressional Budget Office (CBO) is projecting that if changes in federal taxing-and-spending policies already enacted and set to take effect at the beginning of next year do in fact take place, the unemployment rate will climb to 9.1 percent.
[…]Widely referred to as the “fiscal cliff,” the expiration of the Bush tax cuts and over $1 trillion in automatic defense and discretionary cuts as a result of last year’s failed budget deal are set to take effect in January 2013.
[…]If no action is taken by Congress, current CBO projections show that unemployment will not return to pre-recession levels until 2017.
Under current law, federal health care spending is on pace to exceed all discretionary spending by 2016, according to the Congressional Budget Office (CBO).
The change is due to large increases in Medicare and Medicaid spending and added spending under the Affordable Care Act (Obamacare) over the next decade, a feat the Tax Foundation calls a “truly unprecedented and scary” scenario.
The nonpartisan tax research group analyzed recent CBO projections of the budget for 2012 to 2022, finding that over the next decade Medicare spending will increase from $550 billion to $1.064 trillion, while Medicaid would more than double from $253 billion to $592 billion.
In addition, new exchanges and subsidies under Obamacare will force mandatory healthcare expenditures to grow from $25 billion to $181 billion in 2022.
“In total, healthcare entitlement spending is due to more than double, from $828 billion this year to $1.837 trillion in 2022,” according to the Tax Foundation.
“This means healthcare spending will overtake all discretionary spending in 2016 – Obama’s last year in office if reelected,” the group said.
The amount of money the federal government takes out of the U.S. economy in taxes will increase by more than 30 percent between 2012 and 2014, according to the Budget and Economic Outlook published today by the CBO.
At the same time, according to CBO, the economy will remain sluggish, partly because of higher taxes.
“In particular, between 2012 and 2014, revenues in CBO’s baseline shoot up by more than 30 percent,” said CBO, “mostly because of the recent or scheduled expirations of tax provisions, such as those that lower income tax rates and limit the reach of the alternative minimum tax (AMT), and the imposition of new taxes, fees, and penalties that are scheduled to go into effect.”
The U.S. economy, CBO projects, will perform “below its potential” for another six years and unemployment will remain above 7 percent for another three.
Now you might expect that the Democrats would have some bold plan to tackle unemployment, spending and high taxes. And they do!
Bold policy ideas at the Democrat National Convention
Take a look at this video on bold, innovative tax policy from the DNC convention:
That will fix unemployment for sure.
And they want to augment that tax policy with some reasonable pro-growth regulations:
If you don’t think that this is a good plan to solve our economic problems, then Democrats will say that you’re a racist homophobic Islamophobic sexist bigot.
Revenue neutrality. The budget calls for the House Ways and Means Committee to produce a tax reform package with a tax revenue target of between 18 and 19 percent of GDP. This is in line with historical revenue figures. By contrast, big government budgets like “Gang of Six,” “Simpson-Bowles,” and the Obama budget call for a long-range revenue target of over 20 percent of GDP. The Ryan budget is a no tax hikes budget.
Six personal rates down to two. The Ryan budget replaces the current six-rate personal income tax structure (10, 15, 25, 28, 33, and 35 percent) with a two-rate system of 10 and 25 percent. This will result in a lower tax rate on the majority of small business profits, from 33 or 35 percent down to 25 percent.
Repeals Obamacare tax hikes. The Ryan budget eliminates the entire Obamacare law. This includes repealing the 20 new or higher taxes which have taken or are about to take effect from that law.
Eliminate the AMT. The Ryan budget eliminates the AMT, instead favoring a simpler system with lower rates and a broad tax base.
Lower rates on businesses. As said above, the Ryan budget lowers the tax rate on the majority of small business profits to 25 percent. It also lowers the federal income tax rate on larger corporate employers from 35 percent (the highest in the developed world) to 25 percent (closer to the developed nation average). While this makes American companies more competitive, it would still leave us with a higher corporate income tax rate than the developed nation average, Canada, and the United Kingdom. In order to make us truly internationally-competitive, the federal rate must fall to 20 percent or less.
No more picking winners and losers in the tax code. In order to target revenues at 18-19 percent of GDP with tax rates no higher than 25 percent, the Ways and Means Committee will have to curtail or eliminate most tax exclusions, adjustments, deductions, and credits. That means that all consumed income will be taxed once and only once. No longer will the tax code favor one type of economic behavior over another.
Moves tax code from “worldwide taxation” to “territoriality.” The Ways and Means Committee is directed to shift our tax code from one which seeks to tax income earned all over the world to one which only seeks to tax income earned in America. This is known as “territoriality,” and it’s already been adopted by and large by our trading competitors. By retaining a worldwide tax regime, we’re exposing our own countries to double taxation–once when they pay the foreign nation’s income tax, and again when they try to bring the money home.
The National Debt has now increased more during President Obama’s three years and two months in office than it did during 8 years of the George W. Bush presidency.
The Debt rose $4.899 trillion during the two terms of the Bush presidency. It has now gone up $4.939 trillion since President Obama took office.
The latest posting from the Bureau of Public Debt at the Treasury Department shows the National Debt now stands at $15.566 trillion. It was $10.626 trillion on President Bush’s last day in office, which coincided with President Obama’s first day.
The National Debt also now exceeds 100% of the nation’s Gross Domestic Product, the total value of goods and services.
Mr. Obama has been quick to blame his predecessor for the soaring Debt, saying Mr. Bush paid for two wars and a Medicare prescription drug program with borrowed funds.
The federal budget sent to Congress last month by Mr. Obama, projects the National Debt will continue to rise as far as the eye can see. The budget shows the Debt hitting $16.3 trillion in 2012, $17.5 trillion in 2013 and $25.9 trillion in 2022.
[…]His latest budget projects a $1.3 trillion deficit this year declining to $901 billion in 2012, and then annual deficits in the range of $500 billion to $700 billion in the 10 years to come.
If Mr. Obama wins re-election, and his budget projections prove accurate, the National Debt will top $20 trillion in 2016, the final year of his second term. That would mean the Debt increased by 87 percent, or $9.34 trillion, during his two terms.
WINTERY KNIGHT 