With the economy performing worse than hoped, revised White House figures point to deepening budget deficits, with the government borrowing 50 cents for every dollar it spends this year.
The deficit for the current budget year will rise by $89 billion to above $1.8 trillion _ about four times the record set just last year. The unprecedented red ink flows from the deep recession, the Wall St. bailout, the cost of President Barack Obama's economic stimulus bill, as well as a structural imbalance between what the government spends and what it takes in.
As the economy performs worse than expected, the deficit for the 2010 budget year beginning in October will worsen by $87 billion to $1.3 trillion, the White House says. The deterioration reflects lower tax revenues and higher costs for bank failures, unemployment benefits and food stamps.
For the current year, the government would borrow almost half the money it takes to run the government under the administration's plan. In one of the few positive signs, the actual 2009 deficit is likely to be $250 billion less than predicted because Congress is unlikely to provide another $250 billion in financial bailout money.
The developments come as the White House completes the official release of its $3.6 trillion budget for 2010, adding detail to some of its tax proposals and ideas for producing health care savings. The White House budget is a recommendation to Congress that represents Obama's fiscal and policy vision for the next decade.
It is seriously difficult to keep up with the amount of money we are spending or have committed to spending these days. Even the simplist thing, such as the bottom line for the 2010 bugdet, is difficult to track.
Here Obama's budget was $3.4 trillion.
Here Obama's budget was $3.5 trillion.
Today we are being told $3.6 trillion
As everyone can clearly see, we seem to have a hard time keeping track of $200 billion.
No wonder the deficit is growning even though we have not started spending into the 2010 budget yet.