On CNN's American Morning today, business correspondent Christine Romans explained to anchor Kiran Chetry why there are new estimates showing the Federal deficit to be much worse than originally projected by the Obama administration:
ROMANS: Why? OK, this is really -- it's a complicated problem with a very simple analysis. It's how much money the government is taking in and how much money is going out.
Let's look at how much is going out. Government spending has skyrocketed as you all know over the past couple of years, up 21 percent in the first ten months of this year. Unemployment benefits, health care, bailout programs. We are spending more money than we take in. We are spending gobs of money constantly on lots of different programs to try to get this economy out of the mess it's in. At the same time, revenue is plunging.
The money that's coming in to the Treasury Department is plunging down 17 months in the first ten months, or 17 percent, rather, in the first ten months, declining income and peril taxes. People are out of work. We're not making as much money.
ROMANS: That's going down. Non-wage income. All other kinds of income people have down sharply. And then that stimulus tax credit -- that has to come from somewhere. Right? Everyone is getting this big tax break, that means less money going in.
So this is the situation. Money is not coming in like it used to, and money is going out much, much, more quickly than it used to. And the bottom line is that's red ink, red ink, red ink, red ink for ten years.
Giving credit where it's due, Romans accurately noted that Obama's administration has routinely been "overly optimistic" in budget projections. But what about "this big tax break" everyone is getting?
On February 22 of this year, USA Today carried the Associated Press article "Obama: Stimulus tax cuts will be felt by April 1." According to the AP:
Most workers are to see about a $13 per week increase in their take-home pay. In 2010, the credit would be about $7.70 a week, if it is spread over the entire year.
Barack Obama and his Democratic Congress did not deliver a big tax break to everyone. However, Romans's observation that he is "spending gobs of money. . . to try to get this economy out of the mess it's in" is correct. It's Obama's profligate expenditures that are undeniably the principal cause of huge deficits, not illusory big tax breaks.