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This week President Obama released his $4 trillion budget for 2016, a mixed bag of new taxes and new programs and subsidies for the middle class. Last week the Congressional Budget Office (CBO)-Washington's nonpartisan budget arbiter-released its most recent analysis of the economy and fiscal policy. The two documents provide an interesting comparison of political expediency and long term challenges, with the president focusing on short-term spending while CBO warns of a longer term fiscal crisis.
The CBO report estimates that the deficit for 2015 will be $468 billion, slightly lower than this year, and the latest drop in a six year string of falling deficits. While this is welcome news, the CBO is quick to warn that these improvements are only temporary; increased spending, primarily on mandatory programs-will reverse these gains after three years as both deficits and the public debt begin to rise to historic levels. The president's budget, on the other hand, points to the lower deficit and increasing employment as a signs of success and calls for new spending and an end to sequestration.