A new report by the Congressional Budget Office places the national debt at a crossroads. Down one path, the debt steadily decreases as a percentage of the gross domestic product, from 73 percent today to 53 percent in a quarter century. Down the other, it balloons to 199 percent of GDP by 2037.
Mitt Romney’s campaign quickly made clear which road the presumptive Republican nominee believes the country is on.
“Today’s CBO report confirms that President Obama has placed us on a path to fiscal ruin,” Romney policy director Lanhee Chen said in a statement. “This is a president who promised to cut the deficit in half but proceeded to run four consecutive trillion-dollar deficits and accumulate nearly as much publicly held debt as all prior presidents combined.”
The claim that Obama has racked up “nearly as much publicly held debt as all prior presidents combined” has been studied and debunked repeatedly. It excludes intragovernmental holdings, which represent about a third of the total national debt. The total debt was $10.6 trillion on Obama’s inauguration day and is $15.7 trillion today, according to the US Treasury.
The Romney campaign’s interpretation of the CBO report is also dubious.
The report does begin by noting that “over the past few years, the federal government has been recording budget deficits that are the largest as a share of the economy since 1945.”
But it also makes clear that the better road -- the one on which debt as a percentage of GDP drops by 20 points -- is paved with policies endorsed by the Obama administration. The debt reduction scenario includes letting the Bush tax cuts expire at the end of the year, allowing the Affordable Care Act to be implemented fully, and reducing defense spending.
Romney has proposed permanently extending the Bush tax cuts, repealing the Affordable Care Act, and increasing military spending.
The Obama campaign fired back by arguing that Romney is more likely to steer the nation down the wrong road.
“After jacking up the debt in Massachusetts by 16 percent and leaving the state with a $1 billion deficit and the highest per capita debt in the nation, Mitt Romney would now cause the national deficit to skyrocket by proposing $5 trillion in unfunded tax cuts for millionaires and billionaires and raising defense spending to an arbitrarily high level,” Obama campaign spokesman Michael Czin said in an e-mail.
Obama has “jacked up” the national debt by 48 percent, triple the increase Massachusetts experienced under Romney.