Obama said he’s already signed $2.5 trillion in deficit reduction over the last several years and argued that’s more than halfway to the $4 trillion needed to address the deficit problem. A Congressional Budget Office report released last week assumes that the automatic spending cuts under sequestration provide an additional $1.2 trillion in 10-year deficit reduction. In other words, the CBO already assumes deficit reduction roughly in line with what Obama claimed was the goal.
Even under this CBO scenario, however, the nation’s total debt obligations are still projected to grow from $16.5 trillion to $26 trillion by 2023. By another measure, the public debt (which excludes money the Treasury owes to other government accounts, such as the Social Security system) is projected to be 77 percent of GDP by 2023, or more than double the 36.3 percent that it was in 2007, before the onset of the recent economic crisis. Of course, this is just over the next decade. The budget picture gets far worse in the following decades as the retiree population swells and health care costs grow.