During last week Senate mark up of the FY2010 budget, Senator Gregg introduced an amendment “to ensure that the budget of the Federal Government is put on a sustainable path by prohibiting consideration of a budget resolution that does not meet the minimum standard of budgetary discipline as defined by the Treaty on European Union (the Maastricht Treaty): a budget deficit no larger than 3% of GDP and government debt no larger than 60% of GDP.”
In the current fiscal context, capping debt should be a no-brainer. According to CBO, if adopted Obama’s budget would produce a deficit of $1.4 trillion, or 9.6 percent of GDP, in fiscal 2010. The cumulative deficit over the 2010–19 projection period would equal $9.3 trillion and would average 5.3 percent of GDP. Debt held by the public would rise from 65 percent of GDP in fiscal 2010 to 82 percent in 2019.
As the senator explains, “To say it another way, if you take all the debt of our country run up by all of our presidents from George Washington through George W. Bush, the total debt over all those 200 plus years since we started as a nation, it is President Obama’s plan to double that debt in just the first five years that he is in office.”
And yet the amendment was rejected.