(Source: Commercial Appeal, The)
WASHINGTON - The government will have to borrow nearly 50 cents for every dollar it spends this year, exploding the record federal deficit past $1.8 trillion under new White House estimates.
New administration budget estimates Monday said that the fiscal 2009 deficit would reach $1.84 trillion, or $89 billion more than forecast in February, while the 2010 figure now is estimated at $1.26 trillion, or $87 billion above the previous number. The fiscal 2008 deficit was $459 billion.
The unprecedented deficit figures flow from the deep recession, the Wall Street bailout and the cost of President Barack Obama's economic stimulus bill - as well as a seemingly embedded structural imbalance between what the government spends and what it takes in.
For the current year, the government would borrow 46 cents for every dollar it takes to run the government under the administration's plan. In 2010, it would borrow 35 cents for every dollar spent.
"The deficits ... are driven in large part by the economic crisis inherited by this administration," budget director Peter Orszag wrote in a blog entry on Monday.
As it has done since taking office in January, the administration tried to stay upbeat. On Monday, it offered new plans for cutting health care costs and in the new budget still maintained its February economic assumptions, which are rosier than nearly any other economists foresee.
The White House still is projecting that the nation's economy will shrink by 1.2 percent this year and increase by 3.2 percent next year. In addition, it projects that "by the end of this year," the economy will be growing at a 3.5 percent annual rate.
The nonpartisan Congressional Budget Office predicts a gross domestic product decline of 3 percent this year, but 2.9 percent growth next year, while the April consensus of 50 blue-chip economists sees a 2.6 percent decline in 2009 and only 1.8 percent growth next year.
"If they keep playing this game, they're going to have real credibility problems," said Brian Bethune, the chief U.S. financial economist at IHS Global Insight.
--------------------
By the numbers
Fiscal 2009 deficit will be $1.84 trillion.
The government will borrow 46 cents for every dollar it takes to run the government.
--------------------
Originally published by From Our Press Services .
(c) 2009 Commercial Appeal, The. Provided by ProQuest LLC. All rights Reserved.
A service of YellowBrix, Inc.
