Earlier today, the Congressional Budget Office [CBO] updated its annual Budget and Economic Outlook. CBO projects the federal government's budget deficit to exceed $1 trillion for the third year in a row. Falling far short of the President's promises, the unemployment rate is expected to remain in excess of 8.5% for the next two years.
In response to CBO's latest warnings, House Budget Committee Chairman Paul Ryan issued the following statement:
"The Congressional Budget Office has again warned policymakers of the urgent need to get Washington's fiscal house in order. This reports confirms again that years of reckless overspending have not produced the economic growth or the jobs that the President promised and that American families need.
"Congressional Republicans are fighting hard to cut government spending and advance pro-growth reforms. CBO credits, in part, the Budget Control Act for lower than expected budget deficits. This modest down payment is only a first step; much hard work remains. Earlier this year, House Republicans passed a plan that puts our budget on the path to balance and our economy on the path to prosperity. Unfortunately, the President and his party's leaders remain unwilling partners in advancing real reform. More than a month after the legally required Mid-Session Review was due, the President still has not offered a credible plan to tackle the threat of ever-rising spending and debt and instead has proposed to double down with another round of deficit spending. And today marks the 847th day since Senate Democrats last produced a comprehensive fiscal plan for the federal government. Responsible leadership is needed to secure our safety net, lift our crushing burden of debt, and create a better environment for job creation.
"CBO's repeated warnings can no longer go unanswered. House Republicans will continue their effort to chart a brighter future, and we remain hopeful that the President and his party's leaders will work with us to ensure upward mobility and greater opportunity for all Americans."
Key facts from the CBO Budget and Economic Outlook Update:
* Fiscal year 2011 will mark the third straight year with deficits in excess of $1 trillion.
* Over the near term, the debt held by the public continues to increase, equaling roughly three quarters of the economy in 2013.
* Approximately two-thirds of the limited improvement in the baseline fiscal outlook stems from the enactment of the Budget Control Act, which will reduce spending by $2.1 trillion over the next decade.
* CBO locked in its economic forecast in early July before the most recent spate of negative economic news. Still their forecast shows sluggish economic growth - GDP is only expected to increase by 2.4 percent this year and by 2.6 percent in 2012 - and persistently high unemployment over the medium-term.
* Unemployment remains well above 8% into 2014.