Obama ad­min­is­tra­tion: Bud­get deficit in­creases to $587B

Daily Local News (West Chester, PA) - - BUSINESS - By An­drew Tay­lor

WASH­ING­TON>> The gov­ern­ment ran a $587 bil­lion bud­get deficit for the just-com­pleted fis­cal year, a 34 per­cent spike over last year af­ter sig­nif­i­cant im­prove­ment from the record deficits of Pres­i­dent Barack Obama’s first years in of­fice.

Fri­day’s deficit news, while sober­ing, does not ap­pear bad enough to jolt a grid­locked Wash­ing­ton into ac­tion to stem the flow of red ink. It came in an an­nual re­port by the Trea­sury De­part­ment and the White House bud­get of­fice.

In the pres­i­den­tial cam­paign, in­tractable bud­get deficits and grow­ing debt have been mostly ne­glected by Demo­crat Hil­lary Clin­ton and Repub­li­can Don­ald Trump.

The lat­est fig­ures show that the gov­ern­ment is bor­row­ing 15 cents of ev­ery dol­lar it spends. Gov­ern­ment spend­ing went up al­most 5 per­cent to $3.9 tril­lion in fis­cal 2016, but rev­enues stayed flat at $3.3 tril­lion.

Obama came to power af­ter the 2008 fi­nan­cial cri­sis and as the econ­omy was still emerg­ing from a deep re­ces­sion, and the deficit spiked to $1.4 tril­lion, which re­quired Trea­sury to bor­row 40 cents for ev­ery dol­lar spent by the gov­ern­ment. It re­mained above $1 tril­lion for three more years be­fore de­clin­ing to $439 bil­lion last year as the U.S. econ­omy con­tin­ues to slowly grow.

“The Obama Ad­min­is­tra­tion’s agenda has spurred durable eco­nomic growth and the long­est streak of job growth on record, while sharply re­duc­ing the deficit to a sus­tain­able level,” said Trea­sury Sec­re­tary Ja­cob Lew said in a state­ment. “We have built a solid foun­da­tion for con­tin­ued in­vest­ment in eco­nomic growth and op­por­tu­nity for all, while main­tain­ing fis­cal dis­ci­pline and us­ing fis­cal space ap­pro­pri­ately to grow the econ­omy.”

Now, the Con­gres­sional Bud­get Of­fice is pre­dict­ing deficits will, more or less, re­main in the $600 bil­lion range for the next sev­eral years. Those are eye­pop­ping num­bers to the av­er­age per­son, but they rep­re­sent about 3 per­cent of the size of the econ­omy, a level many econ­o­mists say is bear­able.

Trump is promis­ing tax cuts es­ti­mated to cost $6 tril­lion or so in the com­ing decade and has crit­i­cized con­gres­sional Repub­li­cans, in­clud­ing House Speaker Paul Ryan of Wis­con­sin, for propos­ing to cut Medi­care and other gov­ern­ment pro­grams. Clin­ton prom­ises to in­crease taxes on the wealthy and spend the money on col­lege tu­ition sub­si­dies, in­fra­struc­ture and ex­pan­sion of Pres­i­dent Barack Obama’s health care law.

“There’s no lead­er­ship on the cam­paign trail. What both Clin­ton and Trump have said, es­sen-

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