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.