August 22,2012

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Julia Lawless, Antonia Ferrier, 202.224.4515

Hatch Calls CBO’s Midsession Review “Indictment” of President Obama’s Failed Economic Agenda

Utah Senator Says, “The future looks grim unless this President gets in the game and starts working to address the looming fiscal cliff, because if we don’t our nation will be pushed into another recession.”

SALT LAKE CITY – U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, called today’s report issued by the Congressional Budget Office (CBO) an indictment of President Obama’s failed economic agenda.  

CBO reported that the unemployment rate will remain over 8 percent for the rest of the year, this is the fourth consecutive year of over trillion-dollar deficits, the country will fall into a recession next year if Congress doesn’t act to avert the so-called fiscal cliff, and health care costs will skyrocket over the next decade.

“This report is an indictment on the President Obama’s failed economic agenda.  Record debt, too many Americans looking for work, skyrocketing health care costs, the threat of a another recession and no leadership from the President of the United States,” said Hatch.  “The future looks grim unless this President gets in the game and starts working to address the looming fiscal cliff, because if we don’t our nation will be pushed into another recession.  Furthermore, I hope this report blasts the notion held by many Democrats that going over the cliff is a solution.  It isn’t - far too much is on the line for millions of struggling middle-class families and small businesses to play a dangerous game of chicken.”

CBO’s report is an indictment on the President’s failed economic agenda:

President Obama has failed to get America back to work: “The unemployment rate will stay above 8 percent for the rest of the year …” 

President Obama has blown the deficit wide open, to over $1 trillion for four consecutive years – a full 7.3 percent of Gross Domestic Product (GDP) for fiscal year (FY) 2012: “The federal budget deficit for fiscal year 2012 (which ends on September 30) will total $1.1 trillion, the Congressional Budget Office (CBO) estimates, marking the fourth year in a row with a deficit of more than $1 trillion.” 

President Obama has increased the debt to historic levels:  “Federal debt held by the public will reach 73 percent of GDP by the end of this fiscal year—the highest level since 1950 and about twice the 36 percent of GDP that it measured at the end of 2007, before the financial crisis and recent recession.”  

Unless action is taken by the end of the year to avert the massive tax hikes and spending reductions known as the fiscal cliff, America’s economy would likely face another recession:

“Such fiscal tightening will lead to economic conditions in 2013 that will probably be considered a recession, with real GDP declining by 0.5 percent between the fourth quarter of 2012 and the fourth quarter of 2013 and the unemployment rate rising to about 9 percent in the second half of calendar year 2013.” 

“The increases in federal taxes and reductions in federal spending, totaling almost $500 billion, that are projected to occur in fiscal year 2013 represent an amount of deficit reduction over the course of a single year that has not occurred (as a share of GDP) since 1969. Consequently, CBO projects that real GDP will drop by 0.5 percent in 2013 (as measured by the change from the fourth quarter of 2012 to the fourth quarter of 2013)—reflecting a decline in the first half of the year and renewed growth at a modest pace later in the year.”

Despite President’s promise that his health law would “bend the cost curve,” CBO found that Medicare, Medicaid and Social Security costs will continue to skyrocket – consuming more and more of America’s economy:

The big three entitlements - Medicare, Medicaid and Social Security - will consume more than half - 55 percent of the total American economy.

Over the next 10 years, Medicare spending will nearly double to $1.1 trillion and the federal share of Medicaid spending will more than double to $592 billion in 2022.   

ObamaCare’s new premium subsidy program - giving federal subsidies to families making up to 92,000 dollars - will now consume 0.5 percent of our GDP in 2022.

After raiding Medicare by more than $716 billion, ObamaCare’s so-called “reforms” mean that Medicare spending will grow from 3.7 percent of GDP to 4.3 percent by 2022 – and two years later the program will become insolvent.