Rep. Kevin Brady, the ranking Republican on the Joint Economic Committee, on the new unemployment figures out today:
The job figures reported today add to the growing body of evidence indicating that the Administration’s economic forecast is much too optimistic. The unemployment rate is already significantly above the Administration’s forecast for all of 2009. The Administration projects that real GDP will fall 1.2 percent in 2009 and rise 3.2 percent in 2010, compared with a Blue Chip Consensus forecast of a decline of 2.6 percent in 2009 and an increase of 1.9 percent in 2010. The CBO forecast of a 3.0 percent decline in 2009 GDP also shows how far off the Administration is likely to be for 2009.
The Administration’s unduly optimistic economic assumptions are a major problem. These optimistic assumptions are a key foundation of the President’s budget proposals, and lead to artificially low deficit and debt projections. No wonder The Economist called the assumptions in the Administration’s budget “deeply flawed” in an article entitled, “Wishful, and dangerous, thinking.” Their effect is to make the Administration’s expansive new spending proposals look less threatening than they actually are.
The reason the Democrats’ Congressional budget resolution got so far off track is that it is based on the President’s budget proposals. This is why a variety of accounting gimmicks are needed to hide the true costs of the Administration’s dangerous spending spree in the Democrats’ House budget resolution. As the Washington Post said last week, in this resolution “Congress deals a blow to ‘honest budgeting.’” The Democrats now are attempting to shoehorn expensive Administration proposals based on unrealistic economic assumptions into a House budget resolution that uses more realistic economic assumptions from the CBO.