I agree with the general concept but the implementation and timing leave 
much to be desired.


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http://finance.yahoo.com/news/CBO-Federal-deficit-projected-apf-
3859951684.html?x=0&sec=topStories&pos=1&asset=&ccode=

CBO: Federal deficit projected at $1.35T
Congressional Budget Office sees 2010 deficit of $1.35 trillion as 
economy lags

By Andrew Taylor, Associated Press Writer , On Tuesday January 26, 2010, 
1:34 pm EST 

WASHINGTON (AP) -- The Senate Tuesday rejected a plan backed by 
President Barack Obama to create a bipartisan task force to tackle the 
federal deficit this year despite glaring new figures showing the 
enormity of the red-ink threat.

The special deficit panel would have attempted to produce a plan 
combining tax cuts and spending curbs that would have been voted on 
after the midterm elections. The measure went down because anti-tax 
Republicans joined with Democrats who were wary of being railroaded into 
cutting Social Security and Medicare.

The Senate vote to kill the deficit task force came just hours after the 
nonpartisan Congressional Budget Office predicted a $1.35 trillion 
deficit for this year as the economy continues to slowly recover from 
the recession.

"Yet another indication that Congress is more concerned with the next 
election than the next generation," said Sen. Judd Gregg, R-N.H., a 
sponsor of the plan.

The budget deficits facing Obama and Congress are large and intractable, 
and the CBO prediction for 2010 is roughly equal to last year's record 
$1.4 trillion ocean of red ink. That means the government is borrowing 
to cover 40 percent of the cost of its programs.

The report predicts a sluggish economic recovery and continued high 
unemployment -- which presages big political problems for President 
Barack Obama and his Democratic allies heading into the midterm 
elections.

The report sees unemployment averaging 10.1 percent this year as the 
economy grows by just over 2 percent. It would grow only slightly more 
next year with an unemployment rate of 9.5 percent.

"CBO expects that the pace of economic recovery will be slow," said 
agency chief Douglas Elmendorf.

The latest estimates also project that the deficit will drop to $980 
billion next year and $480 billion in five years -- but only if a host 
of tax cuts enacted under President George W. Bush are allowed to 
expire. Most budget experts see deficits nearing or exceeding $1 
trillion each year over the next decade once tax cuts and other policies 
are factored in.

It's a sobering reminder of the fundamental imbalance of the federal 
government's budget that comes just days before Obama's Feb. 1 budget 
submission. The White House says Obama will propose a three-year freeze 
on domestic agency budgets, though the savings would barely make a dent. 
It hasn't said whether Obama will proposes tax hikes or cuts to 
spiraling benefit programs such as Medicare, Medicaid and Social 
Security.

The 2010 deficit figure is in line with previous estimates and would be 
less, marginally, than last year's $1.4 trillion shortfall. But plans 
afoot on Capitol Hill for a new jobs bill and a coming Obama request for 
war funds would add to the total.

The spending freeze, expected to be proposed by Obama during the State 
of the Union address on Wednesday, would apply to a relatively small 
portion of the federal budget, affecting a $477 billion pot of money 
available for domestic agencies whose budgets are approved by Congress 
each year. Some of those agencies could get increases, others would have 
to face cuts; such programs got an almost 10 percent increase this year. 
The federal budget total was $3.5 trillion.

The freeze on so-called discretionary programs would have only a modest 
impact on the deficit. The steps needed to really tackle such huge 
deficits include tax increases and curbs on benefit programs like 
Medicare, Medicaid and Social Security.

That was the idea behind the Obama-backed plan to pass a law to create a 
special task force to come up with a plan to curb the spiraling budget 
deficit. Now, Obama may create a weaker version by a presidential order. 
But unlike the plan rejected Tuesday, there's no way to force a Senate 
vote.

Supporters actually garnered 53 votes for the plan co-sponsored by Gregg 
and Budget Committee Chairman Kent Conrad, D-N.D. But 60 votes were 
required under special floor rules. Thirty-six Democrats and independent 
Joe Lieberman of Connecticut voted for the plan as did 16 Republicans.

The task force was rejected after the powerful seniors lobby, led by 
AARP, objected to a potential fast-track debate of cuts to Social 
Security and Medicare. Anti-tax activists and GOP-friendly editorial 
pages pressed Republicans to oppose it. It would have tried to reveal a 
deficit reduction blueprint after the November elections for a vote 
before the new Congress convenes.

The plan was offered as an amendment to a deeply unpopular bill to 
permit the government to borrow an additional $1.9 trillion to finance 
its operations and prevent a first-ever default on U.S. obligations.

Congressional Budget Office: http://cbo.gov/

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