By Gary Wickert

On July 27, 2010, the Congressional Budget Office released a startling report entitled, “Federal Debt and the Risk of a Fiscal Crisis.” Before we take a look at what the report says, it might be a good idea to remind ourselves exactly what the CBO is. The CBO is a federal agency within the legislative branch of the United States government. It is a government agency that provides economic data to Congress and was created as an independent nonpartisan agency by the Congressional Budget and Impoundment Control Act of 1974 to assist the House and Senate Budget Committees analyze the yearly budget submitted by the President’s Office of Management and Budget (OMB). It is not talk radio, Fox News, or even Reality News. It is an agency of the government charged with serving the role of monitoring the President’s budget, thereby providing a bit of a safeguard on government spending. However, the current Obama regime has all but ignored the CBO’s consistent warnings about our soaring deficits and national debt. To deflect from the selfdestructive fiscal policies of the Obama administration, our president and his political operatives within Congress have consistently and loudly claimed that the deficit was inherited and is the fault of George W. Bush. They couldn’t be more wrong.

The new CBO report sounds a clarion warning we already know - that a growing level of federal debt will increase the probability of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage its budget, and the government would thereby lose its ability to borrow at affordable rates. It says it is possible that interest rates will rise gradually as investors’ confidence declines, giving legislators advance warning of the worsening situation and sufficient time to make policy choices that could avert a crisis. But as other countries’ experiences show, it is also possible that investors would lose confidence abruptly and interest rates on government debt would rise sharply. The CBO report goes on to say, “The exact point at which such a crisis might occur for the United States is unknown, in part because the ratio of federal debt to GDP is climbing into unfamiliar, historic territory and in part because the risk of a crisis is influenced by a number of other factors, including the government’s long-term budget outlook, its near-term borrowing needs, and the health of the economy. When fiscal crises do occur, they often happen during an economic downturn, which amplifies the difficulties of adjusting fiscal policy in response.” The report goes on to urge the government to enact drastic spending cuts or tax increases in order to restore investors’ confidence. We know which this administration will choose, as tax increases have been the plan all along.

Blaming George W. Bush for the deficit has become about as old as cries of racism from certain factions on the left. The Washington Post rambled on again last week about Obama inheriting a huge deficit from Bush. But nobody without serious brain injury should swallow this nonsense. A short civics lesson is in order.

Budgets do not come from the White House. They come from Congress, and the party that controlled Congress since January, 2007 is the Democratic Party. They controlled the budget process for Fiscal Year 2008 and Fiscal Year 2009, as well as Fiscal Year 2010 and Fiscal Year 2011. In 2008, the deficit-addicted Democrats had to contend with George Bush, which caused them to compromise on spending, when Bush somewhat belatedly got tough on spending increases. No honest Republican will claim Bush was a hawk on spending, but no honest Democrat can deny that our current deficit and the economic mess we are in is solely the fault of Obama and the Democrats in Congress. Yet they do. Wellrehearsed and in unison.

What the sleight-of-handers on the left aren’t admitting to is that for Fiscal Year 2009, Nancy Pelosi and Harry Reid bypassed George Bush entirely, passing continuing resolutions to keep government running until Barack Obama could take office. After the Immaculation, they passed a massive omnibus spending bill to complete the Fiscal Year 2009 budgets. And where was Barack Obama during this time? He was a member of that very Congress that passed all of these massive spending bills, and he signed the omnibus bill as President to complete Fiscal Year 2009. Let's remember what the deficits looked like during that period:

(Please see graph below.)

If the Democrats inherited any deficit, it was the FY 2007 deficit, the last year Republicans controlled Congress and the budget. That deficit was the lowest in five years, and the fourth straight decline in deficit spending. After that, Democrats in Congress took control of spending, and that includes Barack Obama, who voted for the budgets. If Obama inherited anything, he inherited it from himself.

In a nutshell, what Obama is saying is I inherited a deficit that I voted for and then I voted to expand that deficit four-fold since January 20th.

A mid-year budget review by CBO forecasts that the deficit will be $1.47 trillion this year and $1.42 trillion – spiraling the country downward as it struggles to recover from the recession. Is it by design? Many think so. The federal budget deficit hit a record $1.4 trillion last year, will exceed that figure this year, and exceed this year again in 2011. It is as though somebody who has no idea what he is doing is in charge – or somebody who knows precisely what he is doing.

Those who wish to consider the facts will note that as late as 2007 the budget deficit was only $180 billion – not good, but nothing in a $14 trillion economy. Then the Democrats took control of Congress in 2006. Congress. You know, the body that passes budgets? Since then the budget deficit has ballooned out of control to $1.6 trillion. The Bush blame game continues unabated. A Bloomberg National Poll conducted July 9 to 12 sadly reveals that the Democratic political operatives we call the mainstream media did their job well. It reveals that more Americans blame Bush than Obama for the current federal deficit – 32% to 24%. Among Republicans, 39% say Obama is to blame, while about a quarter of independents hold that view. An electorate that malleable and uninformed makes you feel as though there is no hope for the future of the country. The lesson learned is that we cannot rest in our efforts to disseminate the truth among the ignorant.

The good news is that a new Democratic poll, from Democracy Corps, reveals the public doesn't blame the Bush tax cuts for the deficit like most Democrats do. Maintaining the tax cuts is imperative for a small business, free market solution to the economic vandalism committed by the current regime in Washington. Democrats by the droves are now having to face fiscal reality and are calling for extending the Bush tax cuts. Two more Senate Democrats - Sen. Ben Nelson (D., Neb.) and Sen. Kent Conrad (D., N.D.) joined the growing ranks of Obamanomics defectors and called for extending tax cuts for all earners—including those with the highest incomes—in what appears to be a breakdown of the party's consensus on the how to handle the expiration of Bush-era tax cuts. They joined Rep. Gerry Connolly (D., Va.), Rep. Harry Mitchell (D., Ariz.), Rep. Jim McDermott (D., Wash.), and other Democrats in contravening the “Tax Cuts Bad – Tax Increases Good” battle cry from the left. "There's no proof that the Bush tax cuts had anything but a negative effect," McDermott said. Duh.

Our president is not above simply lying to the American people to further his agenda. Responding to Republican critics in Congress who say his proposed budget carries an irresponsible deficit, Obama said, “I suspect that some of those Republican critics have a short memory, because, as I recall, I’m inheriting a $1.3 trillion deficit … from them.” So much for facts. While telling the American people that he planned to cut the deficit in half by the end of his first term, Obama's budget projections called for a $1.75 trillion budget deficit in 2009, more than the last five Bush deficits combined, and trillion dollar deficits through budget year 2012 which is the last year of his term. Spending under Obama is increased by 24%. The National Debt, which once again is something that Obama had pledged to cut, actually almost doubles in the fantasy world of the world’s most famous community organizer, from $8.4 billion to $15.4 billion by 2019. The deficit that Obama didn’t quite inherit but has clearly vastly expanded – continues to grow.