Deficit estimate dips slightly this year, rises in 2011

Federal budget deficit projections for fiscal 2011 are worsening, even as deficit estimates for this fiscal year have dropped just a bit, the Congressional Budget Office reported Thursday.

In its latest economic outlook, CBO said the deficit for 2010 will exceed $1.34 trillion. That's $71 billion below the previous year's total and $27 billion lower than an earlier $1.35 trillion estimate from CBO for the current fiscal year made in March.

Despite that drop, CBO said this fiscal year's deficit relative to the size of the overall economy is expected to be the second-largest shortfall in the past 65 years. Projected to represent 9.1 percent of the gross domestic product, the deficit this fiscal year is expected to be exceeded only by last year's deficit of 9.9 percent of GDP.

And the new report updates and increases the deficit projected for 2011 to $1.07 trillion. That's more than the $980 billion that had been projected in January.

Projections for 2012 and 2013 are a mixed bag, with deficits seen at $665 billion and $525 billion, compared to the $650 billion and $539 billion estimates, respectively, in January.

But an added cause for worry is that the new projections beyond Jan. 1 are based on assumptions that might paint a more optimistic view than otherwise - such as the assumption that the tax cuts enacted under former President George W. Bush set to expire at the end of this year will do so as scheduled.

They also assume no new legislation aimed at keeping the alternative minimum tax from affecting many more taxpayers is enacted.

CBO attributed the continuing large deficits in large part to a combination of weak revenues and elevated spending associated with the economic downturn and the policies implemented in response to it.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

    Download
  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

    Download
  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

    Download
  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

    Download
  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care

    Download

When you download a report, your information may be shared with the underwriters of that document.