“I am absolutely committed to fiscal responsibility."
–President Barack Obama, September 8, 2010
On September 13, 2010, the Treasury Department released its Monthly Treasury Statement for August 2010. The report showed that the deficit for the month of August totaled $90.5 billion and the deficit for FY 2010 rose above $1.2 trillion for only the second time in history—last year being the first. Over the last 20 months, President Obama and Congressional Democrats’ have embarked on an unprecedented spending spree that has lowered economic growth, reduced investment, increased the cost of borrowing and killed American jobs.
Truly Unprecedented Spending and Deficits in Obama’s First 20 Months
Since President Obama took office in January, 2009, Democrats in Washington have implemented an agenda of record spending and deficits. According to Treasury Department figures, the Democrats’ binge of spending and deficits is unprecedented in the nation’s history.
- Since Democrats have been in control of the White House and Congress, profligate spending has led to $2.34 trillion in budget deficits. The total amount of deficits in the first 20 months of President Obama’s administration is more than the combined deficits of President Bush’s administration over eight years, which were previously the highest deficits of any president in history.
- In the 20 months since President Obama moved into the White House, Democrats have spent $5.81 trillion. The total amount of spending by the Obama administration is higher than the first 20 months of the Administration’s of presidents Clinton and Bush (43) combined.
- Deficits under President Obama are an astounding $1.46 trillion more than the combined deficits accrued under Presidents Reagan, Bush (41), Clinton, and Bush (43) in each of their first 20 months in office.
- As spending and deficits rise to historic levels, debt and interest payments to foreign competitors rise with it. The Treasury Department reported that in August 2010, the government spent $20.5 billion to make interest payments on the money it borrowed. So far this year, the government has spent $395.7 billion on interest payments.
- According to CBO, spending on interest payments this year alone could have paid for nine of the 12 annual appropriations bills in FY 2010. (FY 2010 appropriations for Agriculture, Departments of Commerce, Justice, & Science, Energy and Water, Financial Services, Interior and Environment, Legislative Branch, Military Construction and VA, and Transportation & HUD totaled $374.7 billion).
The Economic Cost of Staying the Course
Earlier this year, CBO released a report showing that runaway spending, record deficits, and astounding debt means higher unemployment, less opportunities, and an economy that has failed to recover.
- The growing deficits under the Democrats’ leadership will ultimately lead to a lower standard of living and less opportunity for future generations of Americans. According to CBO, “Budget deficits would reduce national saving, leading to higher interest rates, more borrowing from abroad, and less domestic investment—which in turn would lower income growth in the United States.”
- As spending by the federal government grows to unsustainable levels, the U.S. will sacrifice its sovereignty by becoming dependent on debt borrowed from foreign countries.
- As the nation’s debt grows, confidence in financial markets will erode and propel the U.S. into a perpetual economic spiral. According to CBO, “Higher debt would increase the probability of a fiscal crisis in which investors would lose confidence in the government’s ability to manage its budget.”