President Barack Obama boasted a shrinking budget deficit as part of broader comments about the economic recovery in his 2015 State of the Union Address — but a new national report projects bubble-bursting numbers in the near future.
“At every step, we were told our goals were misguided or too ambitious; that we would crush jobs and explode deficits. Instead, we've seen the fastest economic growth in over a decade, our deficits cut by two-thirds, a stock market that has doubled, and health care inflation at its lowest rate in fifty years,” Obama said.
The report, from the Congressional Budget Office, said although the annual federal budget deficit has decreased to less than $500 billion over the past few years, that trend will stall in 2016 — and the deficit is likely to increase to more than $1 trillion by 2025. That figure will add to the historically high $18.1 trillion national debt, which has nearly doubled since Obama took office in 2008.
“The fact that they have come down to not even what they were when Bush was in office, when everyone considered them to be very high, seems to be nothing to brag about,” said Roy Cordato, analyst with the right-leaning John Locke Foundation.
The only reason why the federal budget deficit has decreased in recent years is because the Obama administration was spending so much before then, Cordato said.
Josh Gordon, policy director for the Concord Coalition, a national nonpartisan group that advocates for better public understanding of federal budget issues, said the deficit fluctuations are characteristic of a recovery from a recession.
“Whenever you have a recession, you have larger budget deficits. Then coming out of the recession, that process reverses — and so you begin to have shrinking budget deficits, and that’s really what the story has been through the last five years,” Gordon said.
With regard to future increases in the budget deficit, he said although most government programs are shrinking, the main driving forces are Medicare, Medicaid, Social Security and interest on the national debt itself.
He also said burgeoning national debt poses problems to the country in a number of ways. As the debt increases, the interest that accumulates adds to it — increasing interest costs to the U.S.’s foreign creditors such as China and Japan.
