Deficit Figures Not as Rosy as Jim Nussle Suggests

Recent Congressional Budget Office figures demand our attention, but not for the reasons my colleague Jim Nussle mentions.

The CBO has confirmed that the budget deficit for 2006 will be one of the largest in history. This report comes on top of the three largest deficits in history, all of which have occurred since President Bush took office. The $250 billion deficit now estimated for 2006 marks a deterioration of $486 billion from the $236 billion surplus recorded for 2000. When the Social Security surplus is excluded from the calculations - as it should be - the deficit for 2006 is likely to be at least $420 billion. Though today's estimates for 2006 are not as pessimistic as some earlier estimates, it is clear that the budget remains on the wrong track, with the Congressional Budget Office and even the Bush Administration estimating that deficits will be even larger next year.

The large deficits that have occurred on this Administration's watch have resulted in a sharp spike in our national debt. Since 2002, the Republican Congress has been forced to raise the legal limit on our national debt four times, by a total of $3 trillion. A growing portion of taxpayer dollars is being spent to pay the interest on this mountain of debt, nearly 45 percent of which is now held by foreign investors. Meanwhile, U.S. global competitiveness has fallen from first to sixth in a study released just last week, in part because of the burden of large deficits and growing debt.

Democrats support a return to a fiscally responsible path, with budgets that achieve balance and tough budget enforcement rules. This CBO report is the latest reminder of how much work needs to be done to put our nation's fiscal house back in order.