The Wall Street Journal reports:
The Congressional Budget Office projected a deficit of almost $1.3 trillion for fiscal 2011. Though that will mark the third straight year of deficits above $1 trillion, the deficit forecast was a slight improvement from the almost $1.4 trillion estimated in an April analysis and reflected higher-than-anticipated revenue from individual income taxes.
The outlook for the U.S. economy also remains challenging, with growth expected to remain too slow this year and next year to make a big dent in the unemployment rate. The jobless rate will fall to 8.9% by the end of calendar 2011 and 8.5% by the end of 2012, the forecast said, as the economy grows by 2.3% this year and 2.7% next year, measured from fourth quarter to fourth quarter.
The good news is that the Republicans’ insistence on some moves toward fiscal discipline have helped. The House Budget Committee explains:
• 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.
Had Obama had his way and gotten a “clean” debt-ceiling increase, we would be in far worse shape with regard to the debt. But the real problem remains the sluggish economy.
Speaker of the House John Boehner made that point in a jobs-focused statement:
The bottom line in this underwhelming report: while the spending cuts made in recent months have resulted in some limited improvement in our fiscal outlook, President Obama’s policies are continuing to make it harder for the private sector to create jobs, and that’s continuing to make it harder to balance the federal budget. The CBO update is further confirmation of the need for the president to abandon his reliance on short-term fixes and ‘stimulus’ spending gimmicks, and work with us to remove government barriers that are standing in the way of long-term job growth. . . .
Instead of giving a campaign-minded speech on jobs next month, the president must take action. He must break sharply with his past policies, abandon his reliance on short-term fixes and ‘stimulus’ spending gimmicks that are driving up the deficit and spreading uncertainty, and begin a bipartisan effort to remove government barriers that are standing in the way of long-term private-sector job growth. He must also put the full weight of the presidency behind bipartisan fiscal reforms that will reduce the deficit and strengthen the integrity of our entitlement programs while rejecting job-killing tax hikes.
Obama isn’t likely to do that anytime soon. But what about the GOP presidential contenders? So far they, too, are stuck making “campaign-minded speeches.” A detailed jobs and/or debt plan would be helpful about now.