From Reuters. Ok, so the deficit for this year is actually going down by about $300B, because of bank bailout money that never got paid out (thank God for small favors). And most of the deficit increase this year came from bailout policies initiated by George Bush, and from the stimulus, nearly half of which came in tax cuts. So Obama doesn't quite own this the way Republicans say he does. Not yet.
But these projections spell big trouble. There are only a couple ways to curb federal spending in any real significant way, and they all go through entitlements and defense. So far the President hasn't done a good enough job describing how health care reform was going to cut down on medical costs for both individuals and the federal government. He's dealt away the government's ability to negotiate with the drug companies, and at best he's wavering on the public option, which would introduce competition into markets that are effectively single-sourced at the moment. With this latest news, if September isn't an extremely strong month, rhetorically speaking, the whole thing could just get away from him.
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