Obama admin: Deficits are now next president’s problem

With federal budget deficits on the rise again, the White House Wednesday officially kicked the problem down the road to the next president.

Asked about Congressional Budget Office projections that the federal deficit will spike 33 percent this year, White House press secretary Josh Earnest cited reasons including an aging population and Republican-sponsored tax cuts.

Then he added, “There’s certainly a lot money that can be saved, and this will be a challenge that the next president and the next Congress will have to do.”

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CBO said this week that the government will end fiscal 2016 on Sept. 30 with a deficit of about $590 billion, or 3.2 percent of gross domestic product. That’s up from 2.5 percent of GDP in fiscal 2015, and the first time in six years that deficits are rising as a share of GDP.

Mr. Obama and Congress racked up annual deficits topping $1 trillion in his first three years in office, as Washington tried to blunt the effects of a severe recession. After a peak deficit of $1.4 trillion in 2009, the government’s red ink fell to a low of $439 billion in fiscal 2015.

During Mr. Obama’s presidency, the total national debt has risen from $10.6 trillion to nearly $20 trillion.

CBO’s forecast also said interest rates should remain low, keeping the government’s annual debt-service payments from rising more rapidly.

Mr. Earnest said the president is “quite proud of the record under his tenure in office of reducing our deficit by about three quarters.”

“That’s [an] indication that we had things moving in the right direction, but it’s clear that as the population of the United States ages that there are additional steps that we’re going to need to take,” he said.

Those steps, he said, “could include additional steps to reform the healthcare system in this country that is certainly increasing in cost.”

Administration officials frequently cite Obamacare as helping to limit increases in health-care costs.

Mr. Earnest said the job of reducing budget deficits is “going to require Democrats and Republicans working together more effectively, and there hasn’t been a lot of cooperation on the part of Republicans from working with the administration to try to get this done.”

He also said the rising deficit numbers “were not aided by the significant tax cuts that were passed by the Republican Congress at the end of last year that primarily benefited wealthy corporations.”

Congress last December approved a $680 billion tax package without offsets to make permanent a series of temporary tax breaks known as “extenders” such as deductions for business equipment; breaks for the film and TV industries and savings for energy-efficient buildings. The nonprofit Committee for a Responsible Federal Budget said with interest, the cost of the tax breaks is about $830 billion.

Republicans pushed the tax breaks, and many Democratic lawmakers also voted for the overall budget package, which was signed into law by Mr. Obama.