Budget Crunch

Obama’s Trillion Dollar Deficit

Rescue package could cost $8.5 trillion

President-elect Barack Obama’s “win-at-any-cost approach” to the economic crisis does indeed have a hefty price tag: the government’s rescue package is now estimated at $8.5 trillion, which the Los Angeles Times points out is “half of the entire economic output of the U.S. this year.” Also worrisome: the deficit during Obama’s first year in office is set to “easily bust” $1 trillion (and the national debt has surpassed $10 trillion). “I didn't think we'd see that for a long time,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “There's a huge risk of another economic crisis, a debt crisis, once we get on the other side of this one.” Plus, the spending will make it more difficult for Obama to move forward with new initiatives and campaign promises. “In 1993, a deficit only a third the size of next year's projected $1 trillion prompted President Clinton to abandoned his campaign pledges of tax cuts,” the Times explains.