U.S. Headed For Record Deficit In 2009

Bush Administration Blames $482B Budget Deficit On Slumping Economy, Stimulus Payments

(CBS/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.

The budget office predicts the economy will grow at a rate of 1.6 percent this year and will rebound to a 2.2 percent 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 percent this year, but easing to 2.3 percent next year - better than the 3.0 percent 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 deficit numbers for 2008 and 2009 represent about 3 percent of the size of the economy, which is the measure seen as most relevant by economists. By that measure, the 2008 and 2009 deficits would be smaller than the deficits of the 1980s and early 1990s, when Congress and earlier administrations cobbled together politically painful deficit-reduction packages.

The administration actually underestimates the deficit, however, 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.

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.

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.

In Washington today Barack Obama huddled with his economic team, people who've served presidents from Carter to Clinton, even George W. Bush, reports CBS News Capitol Hill correspondent Chip Reid.

"We have to change course and we're going to take immediate action," Obama said.

One of his first priorities will be ending the Bush tax cuts for people making more than $250,000 a year, and using the money for a tax cut for the middle class.

But Obama has also called for more spending -- on everything from universal health care to a new economic stimulus package -- and with the deficit now soaring even these great minds may have trouble finding the money.

John McCain has also surrounded himself with some of the best minds in business, Reid reports, including Carly Fiorina, former CEO of Hewlett Packard, and Meg Whitman former head of E-bay.

Today they briefed reporters on the importance of cutting taxes on business to create jobs.

"Small business is the engine of growth in this economy," Fiorina said.

McCain says he'll balance the budget by the end of his first term, but critics wonder how that's possible given his support for extending all of the Bush tax cuts, Reid reports.

McCain used the news to slam both the Bush White House for its "profligate spending" and Democratic rival Barack Obama for saying he would not try to balance the budget.

"I have an unmatched record in fighting wasteful earmarks and unnecessary spending in the U.S. Senate and I have the determination and experience to do the same as President," McCain said in a statement.

Obama's campaign used the new numbers to attack McCain for embracing Bush's tax cuts. Obama, said campaign policy director Jason Furman, "will restore balance and fairness to our economy by cutting wasteful spending, shutting corporate loopholes and tax havens, and rolling back the Bush tax cuts for the wealthiest Americans, while making health care affordable and putting a middle class tax cut in the pocket of 95 percent of workers and their families."

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."

[kdgrames]

Does anyone else notice how the deficit corresponds with the "war" budget??? The same with the price of foreign products (oil).

[pensacola88]

Playing funny money games and devaluing the dollar and selling bonds to China and the rest of the world inflated these numbers. We have only ourselves to blame for this. The USA needs friends in the world and needs to be friendly to other countries in the world. Loud mouth politics won''t help the US Treasury or our personal bank accounts appear healthy.

US tourism is down by 1 billion dollars a day because we restricted visits by requiring passports, and now we have 10 million less tourists every day. Each tourist spent $100 a day. We lost 365 billion dollars each year. Those billions went to Europe and Canada. That is why our deficit appears high and our dollar appears weak...because, it actually is.

[pensacola88]

Even Mexican Pesos have gained 25% in the past three months against the US dollar.

[pfanerk]

Helluva job, Georgie. You da man!

[micma-2009]

Bush''s tax cuts for the rich weren''t tax cuts at all. In just 7 years he''s doubled the deficit. All that money will have to be paid back with interest by raising taxes. It''s called a deferred tax increase.

Thanks Bushies!


lol!

[godseyesore-2009]

Bush can''t put this other than on his idiotic administration and his own stupidity.
Dinosaurs all, hopefully to be extinct.

[irliberal]

Republicans: The party that wouldn''t even exist at all anymore except for their platform of hating gay people and anyone who doesn''t subscribe to their particular brand of religion. These days, being a "conservative" has nothing to do with being conservative fiscally, it just means you hate minorities, love war, fetuses (until they are born) and have no sense of fiscal responsibility whatsoever. The last eight years have proven that beyond a shadow of a doubt.

Over SIX years of war. Civil rights breached by our commander in chief. Internationally recognized torture sanctioned by the White House. Two invaded and currently occupied countries. Hundreds of thousands dead, including OVER 4500 American soldiers. Billions of our tax dollars spent, and yes, are still being spent to this very moment.

Iraq, which had NOTHING to do with 9/11, is now an occupied country which will implode when we get out of it, whether that happens one, two, ten or five hundred years from now. A society that CHOOSES to be ruled by religion cannot become a democracy; it can only be a theocracy with voting cards.

Bin Laden still lives. The mastermind of 9/11 still walks free.

The one, simple word for this is: failure. No amount of deception, indignation or wailing by republicons can change these facts.

Failure of Bush. Failure of Cheney. Failure of the republicans.

Time for a change.

[incog-nito]

Statement from President Bush: "It''s all the American people''s fault. If I hadn''t given them those stimulus checks the deficit wouldn''t be this bad. Although I''ve been in charge for almost 8 years, anything bad that happens is always someone else''s fault, never mine."

[mtracy9]

Bush-boy suckered America''s middle-class into supporting tax cuts by throwing it a couple bones, while the majority of the cuts went to the richest Americans. As a result Bush-boy has doubled the national debt, whereas the national debt had begun to shrink at the end of the Clinton administration.

[hotpaulie]

I love this conservative administration.

[vnveteran72]

The Criminals over at the Fed will keep loaning Air Money to their Pals at Criminal Banks to keep them afloat, at least until Shrub leaves for the safety of his Nonextraditionary Compound in Paraguay. After all, it''s all paid for by Stupid American Taxpayer Slaves, and nobody cares what they have to say.
It''s good to be in the Ruling Elite Royalty.

[xmanborg]

10 Billion Dollars a month to keep Iraq war going.

Good Ridance to ALL the Bushies and send them all back to that Big Group Home in Crawford Texas for REETARDs.

[talkingham]

Thanks for wasting a trillion dollars on Iraq and destroying our economy Bush. He''s not the idiot that libs make him out to be, he''s done exactly what you set out to do, destabilize as much of the world as possible to feed daddy''s New World order.

[shawnp20]

U.S. Headed For Record $490B Deficit

Is this what they are going to put on Bush''s headstone?

[macusweil]

Bush and his free spending GOP have taken over the mantle of BIG government and reckless use of tax payer money. The tax and spend liberals could learn a tick or two from these boys. Whew! LOL

[libh8er]

What a bunch of bedwetting lib losers. Too bad you have no knowledge of economics or the economy. Guess your government school educations are shining brightly.

[bogusbones]

what amazes me is the repubs want to reduce taxes amidst this deficit (not to mention debt). who is going to pay for this profligate spending? americans are going to be saddled with the mistakes of this administration for years and years. how in 8 years these people have destroyed a healthy economy is beyond me. the blame will be on the dems and/or the next president for HAVING to raise taxes to pay for these mistakes.

[hotpaulie]

LibH8er - Mr. Republican what needs to be done then about our economy. You don''t agree with the President in spending more money but cutting taxes?

[ddaryl1]

Ok republicans... here''s the challenge

spin this in a positive light, and make me a conservative believer.

Be detailed and link to info that supports your arguments on how republicans are going to fix this, and how they plan to keep happening again.

this is your chance so don''t blow it.

[hotpaulie]

ddaryl1 - don''t hold your breath

[sleepyric]

I think someone should start a movement to give all republicans a chance to dip into their bank accounts and contribute to the deficit fund.....oh, no,,,silly me....their greed and lawyers would advise against that!....can''t screw around with the tax cuts either.....guess we''ll just have to borrow some more from Japan and China...

[Gary Kempf]

(AP) A senior Bush administration official said Monday the U.S. budget deficit for this year will set a record high approaching $490 billion.

This with all of the other Bush and Cheney''s achievements of destruction to the U.S. economy. Way to go Cheech and Chong!!!

[jtdev1]

What a bunch of bedwetting lib losers. Too bad you have no knowledge of economics or the economy. Guess your government school educations are shining brightly.


--------------------------------------------------------------------------------

Posted by LibH8er


And I gues those private rich schools are teaching that running record deficits and debt is the way to go.

Thank you Mr. GOP Republican for all the debt you left us by voting that *** into orfice...

[stevex47]

libhatr,
"Too bad you have no knowledge of economics or the economy."

This is very complicated, but try to keep this in mind.

Deficit=bad.
republican=deficit.
republican=bad.

[terrapin78]

I am tired of being trickled down on.

It smells like urine,not US $$$$$$$$.

Dems in 08!!!!

[terrapin78]

Deficit=bad.
republican=deficit.
republican=bad.

Posted by stevex47 at 10:43 AM : Jul 28, 2008

Your math is correct.

[terrapin78]

These freaking Repugs (you know the "party of personal responsibility") will never accept responsibility for anything. It is always someone/thing else''s fault.

I wish Reagan had been thrown in jail for Iran-Contra and for selling ARMS TO IRAN!

But no, Repugs don''t accept any responsibility for anything!

[slim1h2o]

Bush Administration Official Blames Slumping Economy And Stimulus Payments

And I suppose a couple of wars in the middle-east doesn''t have anything to do with it?

I reckon,,

[redbds]

The deficit is the cost of war. That whole stimulus check thing was a really bad idea. Just further proof that welfare programs of the type that the liberal Obamamats want to implement won''t work either.

[element51]

If Obama wins all this will be dumped in his lap and he will be blamed for it. If McCain wins it will be the fault of the democrats. These repubs just refuse to take responsibility for anything. And LibH8ter calls the dems bedwetting libs. I''m really getting sick of hearing the same old ***** from the right. I wish they would learn a new song. Obama 08!

[obama441]

YEN UP,PESO UP,EURO UP,--the dollar down the plug hole

[redbds]

I think someone should start a movement to give all republicans a chance to dip into their bank accounts and contribute to the deficit fund.....oh, no,,,silly me....their greed and lawyers would advise against that!....can''''t screw around with the tax cuts either.....guess we''''ll just have to borrow some more from Japan and China...

Posted by sleepyric at 10:38 AM : Jul 28, 2008

How about we let hard working American keep more of their money to spend on the economy and cut welfare payments to lazy, deadbeat, baby factories.

[gopack443]

Mission Accomplished!

[book54552134]

Reagan started this horrible trend by quadrupling the national debt to $5 Trillion by granting huge tax cuts to the wealthy.

Then, when he realized that those policies would put the nation''s budget totally out of whack, he decided to make the middle class & poor pay for his corrupt policies by doubling the Social Security tax on those earning less than $90,000. only & then to compound his attack on the middle class, he also doubled the federal gasoline tax as well.

Clinton, instead of correcting this, launched his own attack on the middle class & poor by pushing forward NAFTA, GATT, & his so-called Welfare Reform.

Dubya has doubled Reagan''s debt to $10 Trillion knowing that it will be the middle class who will pay the price, probably by way of a decline in their standard of living. Already, in most families, both spouses must work full time & even then, they are barely able to survive financially. (30 years ago, a family of 5 could live comfortably on the income of one spouse.)

[vietnam21]

What do you mean Deficit ?, We just give pakistan 230 millions plus 4 billions, Israel 40 billions, Paleti 4 bil, Egyp Billions, Columbia 4 billions.

I can go on and on forever, so we are not in Debt., this is just a show... we are rich so rich.

We have spent way too much on foreign aid with billions and billions of dollars down the drain. The Democratss always complain but never looking after this budget because we have bunch off morons in control of Congress."

.

[jimfinster]

Part of the neocon grand plan - put us so deep in debt that social programs can''t be funded.

[walt1944-2009]

The Great Emperor Bush II has admitted that the country is headed for a record deficit this year, which will mean our great-great-great grandchildren will be paying for it.

When asked what he would do about the deficit, "SURRRRRGE" McCain stated he would reduce the deficit in 4 years, even with fighting the numerous wars he would inherit. Asked how he would do this, he stated that he would order every man, woman, and child who made any money at all to give up their entire paycheck to the IRS for the next 4 years!

Of course, this would only affect those who would be considered "poor" and what is left of the "middle class". The wealthy elite and Corporate America would be exempt!

When asked why this action would have to be taken, "SURRRRRGE" McCain responded that we all (or most of us) have to make sacrifices to show our patriotism and "SUPPORT THE TROOPS!"!

SIG HEIL, BUSH!!!!!
sig heil, MORE OF THE SAME, "SURRRRRRGE" McCain!!!!

[vietnam21]

SIG HEIL, BUSH!!!!!
sig heil, MORE OF THE SAME, "SURRRRRRGE" McCain!!!!


Posted by walt1944
hey Walt1944 read this.
We have spent way too much on foreign aid with billions and billions of dollars down the drain. The Democratss always complain but never looking after this budget because we have bunch off morons in control of Congress.

DO YOU UNDERSTAND????

[vietnam21]

SIG HEIL, BUSH!!!!!
sig heil, MORE OF THE SAME, "SURRRRRRGE" McCain!!!!


Posted by walt1944
hey Walt1944 read this.
We have spent way too much on foreign aid with billions and billions of dollars down the drain. The Democratss always complain but never looking after this budget because we have bunch off morons in control of Congress.

DO YOU UNDERSTAND????

[vietnam21]

Posted by shado269 at 11:28 AM

hey shado269

DO YOU UNDERSTAND THIS??
We have spent way too much on foreign aid with billions and billions of dollars down the drain. The Democratss always complain but never looking after this budget because we have bunch off morons in control of Congress.

[impeach__w]

The Bush administration is blaming the ill-advised Stimulus payments!

[missingamerica]

"The official said the deficit was being driven to record levels by the sagging economy and the stimulus payments being made to 130 million households in an effort to keep the United States from falling into a deep recession. "

Nary a mention of the impact caused by the tax cuts, or our practice of enhancing the income of CEOs and stockholders by shipping the base of our economy - our jobs - to low-wage, environmentally-unregulated nations, or high energy costs brought about by this Administration''s economic, trade, and geopolitical policies, or the costs of the war to secure the oil-laden areas of the world...

Must be nice, to be wealthy enough to laugh at the needs of the rest of the world - and even your own people.

[theroo4]

So much for the stimulus package!!!!

[jimfinster]

The Democratss always complain but never looking after this budget because we have bunch off morons in control of Congress.

Posted by vietnam21


Yes, the dems have not done their job. But the blame for this mess rests squarely at the feet of George W Bush.

[lovegetpeace]

So much for the Massive Bush''s Tax Cuts of 2001 and 2003.

Funny how nobody in the NeoCons camp suggest another massive tax cut to create jobs (overseas and H1B Visas).

[lovegetpeace]

Capitalism works best in China where workers have almost no rights and under the firm control (regulation) of a central Government.

Without government controls, Greed kills Capitalism.

[missingamerica]

lollll...to tell you the truth, I think the "tipping point" has already passed...so much of our economy is now gone and offshore energy demand is ramping up so quickly that we should all hug our television sets and computers in preparation for mumbled conversations about the "good old days" when we could afford to turn them on even as we attempt to shield ourselves from the curses of our children and grandchildren...

Before they dress to go off to work as maids and servants in the houses of America''s wealthy.

[timdgrim]

"Both parties recognized that the deficit would increase, and that that was going to be the price that we pay," Perino said.
**************
No, that''s the price WE pay..you''re just a hooker with no brain and no accountability.

[armydog2]

Way to go georgie, still not man enough to say I was wrong and look at the mess I made. You coward and mccain is the same!

[armydog2]

Way to go georgie, still not man enough to say I was wrong and look at the mess I made. You coward and mccain is the same!