White House predicts budget deficit will reach a record $1.47 trillion this year. The government is borrowing 41 cents of every dollar it spends

White House predicts budget deficit will reach a record $1.47 trillion this year. The government is borrowing 41 cents of every dollar it spends


By ANDREW TAYLOR, Associated Press Writer Andrew Taylor, Associated Press Writer – Fri Jul 23, 3:12 pm ET

http://news.yahoo.com/s/ap/20100723/ap_on_bi_ge/us_budget_deficit_2


WASHINGTON – New estimates from the White House on Friday predict the budget deficit will reach a record $1.47 trillion this year. The government is borrowing 41 cents of every dollar it spends.

That's actually a little better than the administration predicted in February.

The new estimates paint a grim unemployment picture as the economy experiences a relatively jobless recovery. The unemployment rate, presently averaging 9.5 percent, would average 9 percent next year under the new estimates.

The Office of Management and Budget report has ominous news for President Barack Obama should he seek re-election in 2012 — a still-high unemployment rate of 8.1 percent. That would be well above normal, which is closer to a rate of 5.5 percent to 6 percent. Private economists don't think the unemployment rate will drop to those levels until well into this decade.

The gaping deficits are of increasing concern to voters. But Obama and Democrats controlling Congress are mostly taking a pass on deficit reduction this year as they await possible recommendations from Obama's deficit commission.

While there's a slight improvement in the deficit for the current year, next year's predicted $1.42 trillion worth of red ink — that's 37 cents of borrowing for every dollar spent — is looking worse. It's about $150 billion more than previously predicted, because of still-slumping tax revenues.

White House budget director Peter Orszag said the numbers represent a "fiscal situation that requires attention."

Deficits have skyrocketed since the recession took hold in 2008 and Congress responded with a massive bailout of the financial system and last year's $862 billion stimulus measure.

Associated Press writer Jeannine Aversa contributed to this report.

http://news.yahoo.com/s/ap/20100723/ap_on_bi_ge/us_budget_deficit_2

CBO: Budget Deficit a post-World War II record at 10.3 percent of the overall economy

National debt to be higher than White House forecast, CBO says

By Lori Montgomery
Washington Post Staff Writer
Saturday, March 6, 2010

http://www.washingtonpost.com/wp-dyn/content/article/2010/03/05/AR2010030502974.html

President Obama's proposed budget would add more than $9.7 trillion to the national debt over the next decade, congressional budget analysts said Friday. Proposed tax cuts for the middle class account for nearly a third of that shortfall.

The 10-year outlook released by the nonpartisan Congressional Budget Office is somewhat gloomier than White House projections, which found that Obama's budget request would produce deficits that would add about $8.5 trillion to the national debt by 2020.

The CBO and the White House are in relative agreement about the short-term budget picture, with both predicting a deficit of about $1.5 trillion this year -- a post-World War II record at 10.3 percent of the overall economy -- and $1.3 trillion in 2011. But the CBO is considerably less optimistic about future years, predicting that deficits would never fall below 4 percent of the economy under Obama's policies and would begin to grow rapidly after 2015.

Deficits of that magnitude would force the Treasury to continue borrowing at prodigious rates, sending the national debt soaring to 90 percent of the economy by 2020, the CBO said. Interest payments on the debt would also skyrocket by $800 billion over the same period.

http://www.washingtonpost.com/wp-dyn/content/article/2010/03/05/AR2010030502974.html

The Disappearing Story of Tax Increases on the Middle Class

Many of you heard about a story that ran on Reuters yesterday about the coming Middle-Class tax increases. Of course in Washington they don’t call it a tax increase – they are not renewing the Bush Tax Cuts and tax rates will therefore increase when the cuts come to an end – but in Washington, that is not considered raising taxes. The White House, unhappy with the story, asked (or told) Reuters to remove the story. By yesterday evening the story was no longer available. It was replaced with a message saying the story was withdrawn and would be replaced with a new story later in the week.

There are two attachments to this email.
1) a screen shot of the actual story, and
2) a screen shot of what appeared after the story was obediently removed by Reuters