A new assessment of President Obama's budget released Friday says the White House underestimates future budget deficits by more than $2 trillion over the upcoming decade.
The estimate from the nonpartisan Congressional Budget Office says that if Obama's February budget submission is enacted into law it would produce deficits totaling $9.5 trillion over 10 years -- an average of almost $1 trillion a year.
Obama's budget saw deficits totaling $7.2 trillion over the same period.
The difference is chiefly because CBO has a less optimistic estimate of how much the government will collect in tax revenues, partly because the administration has rosier economic projections.
But the agency also rejects the administration's claims of more than $300 billion of that savings -- to pay for preventing a cut in Medicare payments to doctors -- because it doesn't specify where it would come from. Likewise, CBO fails to credit the White House with an additional $328 billion that would come from unspecified "bipartisan financing" to pay for transportation infrastructure projects such as high speed rail lines and road and bridge construction.
Friday's report actually predicts the deficit for the current budget year, which ends Sept. 30, won't be as bad as the $1.6 trillion predicted by the administration and will instead register $200 billion less. But 10 years from now, CBO sees a $1.2 trillion deficit that's almost $400 billion above White House projections.
The estimated cost of the new health care law increased by about $90 billion, to $1.13 trillion, from 2012-21. But the budget office didn't issue a new estimate of the taxes and savings in the legislation that pay for Obama's expansion of health insurance.
CBO had earlier projected those offsets at $1.25 trillion. So the margin by which the new health care law reduces deficits appeared to be shrinking.
The White House's goal is to reach a point where the budget is balanced except for interest payments on the $14 trillion national debt.
But CBO predicts that the deficit never gets below 4 percent of gross domestic product. That means that by 2021, the portion of the debt held by investors and foreign countries will reach 87 percent. And, as a result, interest costs for the government would explode from $214 billion this year to almost $1 trillion by decade's end.