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Another Obama Parting Gift


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another-obama-parting-gift-1472248987?mod=wsj_review_&_outlookThe Wall Street Journal : Another Obama Parting Gift His final fiscal year federal budget deficit will increase by 35%.

Aug. 26, 2016 6:03 p.m. ET 753 COMMENTS

As President Obama ends his second term, he’s leaving plenty of political parting gifts. The latest is a 35% single-year increase in the federal budget deficit, and a rising trajectory of spending and debt as a share of the economy. Hillary Clinton’s campaign promise of more “stimulus” spending next year suddenly looks a lot more politically problematic.

 

That’s the story you haven’t read from the Congressional Budget Office’s latest fiscal and economic outlook released this week. For the 2016 fiscal year that ends next month, CBO now forecasts that revenues will rise by only $26 billion while outlays will increase by some $178 billion. The federal deficit will therefore rise from $438 billion to $590 billion, the biggest deficit since 2013.

 

The revenue shortfall reflects the decline in corporate profits and slower economic growth; the second quarter was revised down to 1.1% Friday. Meanwhile, outlays will rise 5% thanks in large part to the automatic spending drivers of Social Security, Medicare and Medicaid (which has soared thanks to ObamaCare). Net interest outlays will rise 11% this fiscal year despite historically low interest rates as overall debt continues to increase.Scissors-32x32.png


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