US budget deficit to reach $9 trillion in a decade
Updated at: 1125 PST, Wednesday, August 26, 2009
WASHINGTON: The White House is predicting a 10-year federal deficit of $9 trillion more than the sum of all previous deficits since America's founding. And it says by the next decade's end the national debt will equal three-quarters of the entire U.S. economy.
White House and congressional budget analysts said in a brace of new estimates that the economy will shrink by 2.5 to 2.8 percent this year even as it begins to climb out of the recession. Those estimates reflect this year's deeper-than-expected economic plunge.
The White House Office of Management and Budget indicated that the president will have to struggle to meet his vow of cutting the deficit in half in 2013 a promise that earlier budget projections suggested he could accomplish with ease.
The deficit numbers also could complicate Obama's drive to persuade Congress to enact a major overhaul of the health care system one that could cost $1 trillion or more over 10 years.
The summer analyses by the White House budget office and by the Congressional Budget Office reached similarly bleak conclusions. The CBO's 10-year deficit figure was smaller $7 trillion but that is because it assumes that all tax cuts put into place in the administration of former President George W. Bush will expire on schedule by 2011.
Obama's budget baseline, however, hews to his proposal to keep the tax cuts in place for families earning less than $250,000 a year.
Both budget offices see the national debt the accumulation of annual budget deficits as more than doubling over the next decade. The public national debt, made up of amounts the government owes to the public, including foreign governments, stood Tuesday at a staggering $7.4 trillion. White House budget officials predicted it would reach $17.5 trillion in 2019, or 76.5 percent of the gross domestic product. That would be the highest proportion in six decades.
Updated at: 1125 PST, Wednesday, August 26, 2009
WASHINGTON: The White House is predicting a 10-year federal deficit of $9 trillion more than the sum of all previous deficits since America's founding. And it says by the next decade's end the national debt will equal three-quarters of the entire U.S. economy.
White House and congressional budget analysts said in a brace of new estimates that the economy will shrink by 2.5 to 2.8 percent this year even as it begins to climb out of the recession. Those estimates reflect this year's deeper-than-expected economic plunge.
The White House Office of Management and Budget indicated that the president will have to struggle to meet his vow of cutting the deficit in half in 2013 a promise that earlier budget projections suggested he could accomplish with ease.
The deficit numbers also could complicate Obama's drive to persuade Congress to enact a major overhaul of the health care system one that could cost $1 trillion or more over 10 years.
The summer analyses by the White House budget office and by the Congressional Budget Office reached similarly bleak conclusions. The CBO's 10-year deficit figure was smaller $7 trillion but that is because it assumes that all tax cuts put into place in the administration of former President George W. Bush will expire on schedule by 2011.
Obama's budget baseline, however, hews to his proposal to keep the tax cuts in place for families earning less than $250,000 a year.
Both budget offices see the national debt the accumulation of annual budget deficits as more than doubling over the next decade. The public national debt, made up of amounts the government owes to the public, including foreign governments, stood Tuesday at a staggering $7.4 trillion. White House budget officials predicted it would reach $17.5 trillion in 2019, or 76.5 percent of the gross domestic product. That would be the highest proportion in six decades.
