October 9, 2012
“Today I am pledging to cut the deficit we inherited in half by the end of my first term in office.” —President Barack Obama, February 23, 2009.
- Last week, the Congressional Budget Office (CBO) released its final monthly budget review for fiscal year 2012 and confirmed the sad inevitability that the U.S. deficit has exceeded $1 trillion for four consecutive years under President Obama.
- Shortly after taking office, President Obama pledged to cut the deficit in half by the end of his first term. Unfortunately, this turned out to be another empty promise from the president.
- The year before the president took office the highest deficit ever recorded was $458 billion.
- Four years later, it is $1.1 trillion, or 138 percent higher under the president’s failed spending policies.
Deficits Soar under President Obama to Levels Not Seen Since World War II
- According to CBO, the federal deficit was $1.1 trillion in fiscal year 2012, or 7 percent of Gross Domestic Product (GDP).
- Prior to President Obama taking office, the deficit had not reached 7 percent of GDP since 1946. Now, it has been at or above that level for four consecutive years.
- 2012 also marks the fourth consecutive year under President Obama with a deficit of more than $1 trillion. Before President Obama took office, the highest deficit ever was $458 billion.
- President Obama has now been responsible for the five highest deficits of all time:
- $1.413 trillion in 2009.
- $1.294 trillion in 2010.
- $1.297 trillion in 2011.
- $1.090 trillion in 2012.
- The only reason the 2012 budget deficit is the lowest of the president’s tenure in office is because of House Republican efforts to cut discretionary spending two years in a row for the first time in a generation.
- From 2012 through 2022, annual deficits would average $728 billion under the president’s budget and the federal budget would never balance.
- The president has claimed that wasteful Washington spending would create jobs, but the only thing that this president has created is unsustainable deficits and debt.
- The Obama Administration claimed that unemployment would be 5.5 percent today if the failed $1.2 trillion “stimulus” was enacted. In reality, there are 23 million Americans unable to find adequate work and the unemployment rate is 7.8 percent.
- The national debt—which just eclipsed $16 trillion—has increased by $5.5 trillion or 52 percent since President Obama took office. By comparison, our total national debt did not reach $5.5 trillion until 1997, during President Clinton’s second term.
- It took President Obama just over 44 months to rack up as much debt as 42 other American presidents combined. Under President Bush (43) the national debt grew by $4.89 trillion in eight years. President Obama has surpassed that amount by $600 billion in less than half that time.
- According to CBO, the federal debt held by the public (which excludes debt the government owes to its own programs) has reached 73 percent of GDP by the end of FY 2012, twice the 36 percent of GDP that it measured at the end of 2007.
President Obama Does Not Have a Credible Plan
- Instead of addressing the true drivers of our debt, the president is proposing a massive tax increase on small businesses that will do nothing to reduce our structural deficit issues.
- Even with the president’s proposed tax hike, deficits would still total $6.5 trillion over the next ten years, according the president’s own budget projections.
- The president estimates that his small business tax increase would bring in an additional $952 billion in revenue from hard-working small business owners over the next ten years. While that tax increase would hamstring small businesses and destroy 710,000 jobs, it would only pay for 2 percent of the $46 trillion the president wants spend in the next ten years.
- These tax hikes will not reduce the president’s spending and, therefore, will not reduce our debt.
House Republicans Have Passed the Only Credible Plan to Reduce Deficits
House Republicans approved The Path to Prosperity Budget, which is the only credible plan in Washington to reduce the deficit. The Path to Prosperity's major proposals to balance the budget and pay off the debt include:
- Cutting spending by $5.3 trillion over the next ten years relative to the president's budget.
- Reducing deficits by $3.3 trillion compared to the president's budget over the next decade.
- Cutting government spending from its current elevated level of 24 percent of the economy to below 20 percent by 2015.
- Putting the budget on the path to balance and pay off the debt.
For additional information, contact:
The House Republican Conference Policy Office