Friday, August 21, 2009

Associated Press: Deficit to be $2 Trillion Bigger Than Estimated

WASHINGTON (AP) -- The Obama administration expects the federal deficit over the next decade to be $2 trillion bigger than previously estimated, White House officials said Friday, a setback for a president already facing a Congress and public wary over spending.

The new projection, to be announced on Tuesday, is for a cumulative 2010-2019 deficit of $9 trillion instead of the $7 trillion previously estimated. The new figure reflects slumping revenues from a worse economic picture than was expected earlier this year. The officials spoke only on the condition of anonymity ahead of next week's announcement.

Ten-year forecasts are volatile figures subject to change over time. But the higher number will likely create political difficulties for President Barack Obama in Congress and could create anxiety with foreign buyers of U.S. debt.

Earlier this week, the White House revealed that it expects a budget deficit for the fiscal year ending Sept. 30 to be nearly $1.6 trillion. That figure was lower than initially projected because the White House scratched out $250 billion that it had initially added to the budget as a bank rescue contingency. The administration ultimately did not ask Congress for that money.

Still that number, together with the 10-year projection, represents a huge obstacle for an administration trying to undertake massive policy overhauls in health care and the environment.


Opus #6 August 21, 2009 at 9:53 PM  

This is the president who told the nation's businesses "now is not the time for profits. I will tell you when it is time for profits." OK. So he chilled business and killed the goose that lays the golden (tax) egg. Gosh, so revenues are down. You mean government can't pay for itself? You mean somebody else has to pay the salary for every government job? I thought Obama could create jobs out of thin air. Oh, yeah. He can. If he prints the money.

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