Yesterday, we learned that President Obama has led us into a $1.1 trillion deficit with 3 months still remaining in the fiscal year. As taxpayers see our country’s debt grow exponentially from Obama’s pork barrel stimulus projects and other liberal initiatives, they have to wonder whether this is a time we should be passing legislation that will add to our budget shortfalls. The Wall Street Journal reports today that the new record deficit will likely slow Obama’s agenda.
The deficit will be a talking point that the GOP can hammer for weeks and months to come. After the deficit news was reported yesterday, House Minority Leader John Boehner released a statement:
“This trillion-dollar deficit makes clear that our nation’s fiscal situation is dire, yet Washington Democrats keep borrowing and spending money we don’t have and forcing our children and grandchildren to foot the bill.”
Moderate Democrats in Congress will struggle to overcome public pressure to slow down spending. This could halt any efforts to pass a second stimulus package, and it could seriously complicate healthcare reform.
Surging deficits could also tie the administration’s hands in responding to the economy’s problems, by eroding support among voters and making Congress leery of adopting policies — such as an overhaul of the health-care system — that the administration believes are necessary for sustainable growth.
It could be hard to win congressional approval for another round of fiscal stimulus, if that was seen as necessary, even as the economy continues to lag and the unemployment rate continues to rise, hitting 9.5% in June.
Healthcare costs are estimated to top $1 trillion over the next ten years. Vulnerable members of Congress will be hesitant to add to the national debt. Democrats often make the claim that a healthcare overhaul will cut the deficit, but in order to accomplish that, the potential plans are likely to contain significant tax increases. Estimates for savings are also currently based on fuzzy math.
President Barack Obama on Monday stressed the importance of enacting health-care legislation as a way to bring down long-term deficits. A spokesman for the White House Office of Management and Budget, Kenneth Baer, termed health-care reform “the key to our fiscal future.”
But some budget watchdogs worry that Congress eventually could pass health-care legislation that relies on uncertain long-term savings, while substantially increasing short-term government expenditures.
Also released today is a USA Today/Gallup poll showing that Americans want healthcare reform but are not enthusiastic about the proposed methods of paying for it. Democrats will struggle in the coming weeks to fight off challenges to their reckless spending. One thing possibly working in their favor is that the country’s top newspapers largely ignored the deficit news today.