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US heading for record $490 billion budget deficit.
And that $490 billion doesn't even count the whole cost of the war in Iraq. Last year Democrats forced the White House to include the whole cost of the war in his budget projections (better half a decade late then never) but this year's budget deficit is so massive they're once again fudging the accounting in ways which would get a CEO sent to prison.
It's an election year so you'd expect the budget deficit to go up but strangely the only election related gimmick was the $130 billion bipartisan "stimulus package" which gave a $600 welfare check to everyone. The big problem is the economy sucks and tax receipts are much lower then expected.
If you count the off the books spending in Iraq the total budget deficit is actually $570 billion.
It's an election year so you'd expect the budget deficit to go up but strangely the only election related gimmick was the $130 billion bipartisan "stimulus package" which gave a $600 welfare check to everyone. The big problem is the economy sucks and tax receipts are much lower then expected.
Record 2009 deficit - White House
White House blames economic slowdown and stimulus payments to 130 million households as budget deficit headed to nearly half-trillion dollars.
WASHINGTON (AP) -- The next president will inherit a record budget deficit of $482 billion, according to a new Bush administration estimate released Monday.
The administration said the deficit was being driven to an all-time high by the sagging economy and the stimulus payments being made to 130 million households in an effort to keep the country from falling into a deep recession.
But the numbers could go even higher if the economy performs worse than the White House predicts.
Inflation outlook
The budget office predicts the economy will grow at a rate of 1.6% this year and will rebound to a 2.2% growth rate next year. That's a half percentage point more than predicted by the widely cited "blue chip" consensus of leading economists. The administration also sees inflation averaging 3.8% this year, but easing to 2.3% next year - better than the 3% seen by the blue chip panel.
"The nation's economy has continued to expand and remains fundamentally resilient," said the budget office report.
A $482 billion deficit, however, would easily surpass the record deficit of $413 billion set in 2004.
The new figure actually underestimates the deficit, since it leaves out about $80 billion in war costs. In a break from tradition - and in violation of new mandates from Congress - the White House did not include its full estimate of war costs.
A jump from early forecast
The White House in February had forecast that next year's deficit would be $407 billion, which puts the increase in the projections at $72 billion.
Figures for the 2008 budget year ending Sept. 30 will actually drop from an earlier projection of $410 billion to $389 billion, the report said.
The White House still projects that the budget will reach a surplus by 2012, helped by revenues boosted by optimistic economic projections of economic growth.
The deficit numbers for 2008 and 2009 represent about 3% of the size of the economy, which is the measure seen as most relevant by economists. That's considerably smaller than the deficits of the 1980s and early 1990s, when Congress and earlier administrations cobbled together politically painful deficit-reduction packages.
Pressure on tax-cutting measures
Still, the new figures are so eye-popping in dollar terms that it may restrain the appetite of the next president to add to it with expensive spending programs or new tax cuts. In fact, pressure may build to allow some tax cuts enacted in 2001 and 2003 to expire as scheduled at the end of 2010, with Congress also feeling pressure to curb spending growth.
The deficit for 2007 totaled $161.5 billion, which represented the lowest amount of red ink since an imbalance of $159 billion in 2002. The 2002 performance marked the first budget deficit after four consecutive years of budget surpluses.
That stretch of budget surpluses represented a period when the country's finances had been bolstered by a 10-year period of uninterrupted economic growth, the longest period of expansion in U.S. history.
In his first year in office, helped considerably by projections of continuing surpluses, Bush drove through a 10-year, $1.35 trillion package of tax cuts.
However, the country fell into a recession in March 2001 and government spending to fight the war on terrorism contributed to pushing the deficit to a record in dollar terms in 2004.
House Budget Committee Chairman John Spratt, D-S.C., said the new deficit figure confirms "the dismal legacy of the Bush administration: under its policies, the largest surpluses in history have been converted into the largest deficits in history."
White House blames economic slowdown and stimulus payments to 130 million households as budget deficit headed to nearly half-trillion dollars.
WASHINGTON (AP) -- The next president will inherit a record budget deficit of $482 billion, according to a new Bush administration estimate released Monday.
The administration said the deficit was being driven to an all-time high by the sagging economy and the stimulus payments being made to 130 million households in an effort to keep the country from falling into a deep recession.
But the numbers could go even higher if the economy performs worse than the White House predicts.
Inflation outlook
The budget office predicts the economy will grow at a rate of 1.6% this year and will rebound to a 2.2% growth rate next year. That's a half percentage point more than predicted by the widely cited "blue chip" consensus of leading economists. The administration also sees inflation averaging 3.8% this year, but easing to 2.3% next year - better than the 3% seen by the blue chip panel.
"The nation's economy has continued to expand and remains fundamentally resilient," said the budget office report.
A $482 billion deficit, however, would easily surpass the record deficit of $413 billion set in 2004.
The new figure actually underestimates the deficit, since it leaves out about $80 billion in war costs. In a break from tradition - and in violation of new mandates from Congress - the White House did not include its full estimate of war costs.
A jump from early forecast
The White House in February had forecast that next year's deficit would be $407 billion, which puts the increase in the projections at $72 billion.
Figures for the 2008 budget year ending Sept. 30 will actually drop from an earlier projection of $410 billion to $389 billion, the report said.
The White House still projects that the budget will reach a surplus by 2012, helped by revenues boosted by optimistic economic projections of economic growth.
The deficit numbers for 2008 and 2009 represent about 3% of the size of the economy, which is the measure seen as most relevant by economists. That's considerably smaller than the deficits of the 1980s and early 1990s, when Congress and earlier administrations cobbled together politically painful deficit-reduction packages.
Pressure on tax-cutting measures
Still, the new figures are so eye-popping in dollar terms that it may restrain the appetite of the next president to add to it with expensive spending programs or new tax cuts. In fact, pressure may build to allow some tax cuts enacted in 2001 and 2003 to expire as scheduled at the end of 2010, with Congress also feeling pressure to curb spending growth.
The deficit for 2007 totaled $161.5 billion, which represented the lowest amount of red ink since an imbalance of $159 billion in 2002. The 2002 performance marked the first budget deficit after four consecutive years of budget surpluses.
That stretch of budget surpluses represented a period when the country's finances had been bolstered by a 10-year period of uninterrupted economic growth, the longest period of expansion in U.S. history.
In his first year in office, helped considerably by projections of continuing surpluses, Bush drove through a 10-year, $1.35 trillion package of tax cuts.
However, the country fell into a recession in March 2001 and government spending to fight the war on terrorism contributed to pushing the deficit to a record in dollar terms in 2004.
House Budget Committee Chairman John Spratt, D-S.C., said the new deficit figure confirms "the dismal legacy of the Bush administration: under its policies, the largest surpluses in history have been converted into the largest deficits in history."
If you count the off the books spending in Iraq the total budget deficit is actually $570 billion.
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