Federal Budget: Record Deficits and Debt

• From 1989 through 2008, annual budget deficits averaged $210 billion (adjusted for inflation).
• President Bush handed President Obama a $1.2 trillion deficit for 2009. Obama added more than $200 billion to it.
• President Bush’s budget deficits averaged $447 billion. President Obama’s budget shows average deficits of $851 billion over the eight years he would serve if he wins a second term.
• President Obama’s budget would double the publicly held national debt by 2020.

• Despite increased borrowing, record-low interest rates have kept net interest costs down.
• Under the President’s budget, the combination of rising interest rates and a doubling of the national debt would nearly quadruple inflation-adjusted net interest costs over the next decade.
• By 2020, net interest costs would account for a record 16.1 percent of the federal budget and 4.1 percent of GDP. Net interests costs would be nearly three-quarters the size of the entire $1,041 billion deficit.

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