Congress' Budget Experts Say Obama's Debt Estimate Too Low

What's a trillion dollars between friends? The non-partisan Congressional Budget Office estimates that President Barack Obama's spending plan will add $9.8 trillion to the national debt over the next 10 years -- about $1.3 trillion more than the president's own projection.

There's more harmony on the budget for this year. The CBO, an arm of Congress, said Obama's 2010 budget would produce a one-year deficit of $1.5 trillion if enacted by the House and Senate as written. That's about the same as the president's own estimate, and amounts to a little more than 10 percent of the Gross Domestic Product, a measure of the overall economy. Last year's budget deficit ran at 9.9 percent of GDP, CBO said.

Differences -- big or small -- in calculating gaps between receipts and spending usually have to do with degrees of optimism. Economists often disagree in their projections of future growth in tax revenue flowing into the U.S. treasury.

Some progress in limiting the red ink is forecast for the near-term. The annual deficit would fall to 4 percent in 2014, but then begin rising again, the CBO said.

Perhaps surprising to Obama's critics, a big chunk of the budget deficits comes from his tax cut plans -- specifically the indexing against inflation of the Alternative Minimum Tax. To protect families earning under $250,000, the president wants to prevent the ATM from expanding its reach and increasing the burden on middle class taxpayers.

"By far the largest budgetary impact would stem from the president's propsals to index the Alternative Minimum Tax for inflation and to extend various (other) tax provisions" enacted in 2001, the CBO said.

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