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Chairman Spratt's Statement on the Congressional Budget Office’s Update on the Budget and Economy

FOR IMMEDIATE RELEASE
September 9, 2008

WASHINGTON – House Budget Committee Chairman John Spratt (D-SC) issued the following statement on today’s publication of the Congressional Budget Office’s outlook on the budget and economy.

“Today’s estimates from the Congressional Budget Office (CBO) provide the latest evidence of the fiscal legacy of Republican policies: record deficits accompanied by a weak economy.
“President Bush took office in 2001 with our economy moving in the right direction. We had enjoyed four consecutive years of budget surpluses, unemployment was a low 4.2 percent compared to the current 6.1 percent, and debt held by the public had been declining steadily since 1998. In the last eight years, the policies of this Administration have weakened our fiscal situation, and now virtually every major economic indicator is moving in the wrong direction. Unemployment and inflation are both now about six percent. Real hourly earnings have fallen for nine straight months and home prices have fallen for 18 straight months, to a level that is 17 percent below a year ago.

“Today CBO is reporting more of the same: real GDP growth is forecast at only 1.9 percent in 2008 and 0.8 percent in 2009, even lower than CBO’s forecast in March and significantly lower than the average for the last 40 years. The economy has lost 772,000 private sector jobs since December alone. In fact, the economy, which created 240,000 jobs per month between 1993 and 2000, has averaged only 55,000 new jobs a month since 2001 – little more than a third of the increase needed to keep pace with growth in the working-age population. CBO’s new forecast shows ongoing weakness in the job market, with unemployment rates for 2008 and 2009 rising since CBO’s March forecast.

“CBO’s update shows that the Bush Administration has presided over the largest fiscal deterioration in years, at the center of which is a 2008 deficit now estimated at $407 billion, the second largest ever recorded by the U.S. government. When this Administration took office in 2001, it inherited a projected surplus for 2008 of $651 billion, by its own calculation. We have instead a deficit of $407 billion, representing a swing in the wrong direction of more than $1 trillion in 2008 alone. Today’s report is another reminder of the dismal economy and budget that Republicans leave others to sort out.”