Budget Deficit To Surpass $1.8 Billion

Government Needs More Than Four Times The Record Amount Set Last Year, White House Reports

(AP)  With the economy performing worse than hoped, revised White House figures point to deepening budget deficits, with the government borrowing almost 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 Street 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 46 cents for every dollar 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.

Annual deficits would never dip below $500 billion and would total $7.1 trillion over 2010-2019. Even those dismal figures rely on economic projections that are significantly more optimistic - just a 1.2 percent decline in gross domestic product this year and a 3.2 percent growth rate for 2010 - than those forecast by private sector economists and the Congressional Budget Office.

For the most part, Mr. Obama's updated budget tracks the 134-page outline he submitted to lawmakers in February. His budget remains a bold but contentious document that proposes higher taxes for the wealthy, a hotly contested effort to combat global warming and the first steps toward guaranteed health care for all.

Mr. Obama's Democratic allies controlling Congress have already made it clear that they will reject key elements of his plan. Already apparently dead is a plan to raise $267 billion over the next decade to pay for his health care initiative by curbing the ability of wealthier people to reduce their tax bills through deductions for mortgage interest, charitable contributions and state and local taxes.

And the congressional budget plan approved last month would not extend Mr. Obama's signature $400 tax credit for most workers - $800 for couples - after it expires at the end of next year.

Mr. Obama's remarkably controversial "cap-and-trade" proposal to curb heat-trapping greenhouse gas emissions is also reeling from opposition from Capitol Hill Democrats from coal-producing regions and states with concentrations of heavy industry. Under cap-and-trade, the government would auction permits to emit heat-trapping gases, with the costs being passed on to consumers via higher gasoline and electric bills.

Among the new proposals is a plan - already on its way through Congress - that would increase the Federal Deposit Insurance Corporation's borrowing authority from $30 billion to $100 billion in order to grant a two-year reprieve from higher deposit insurance premiums while the industry is struggling.

Also new are several tax "loophole" closures and increased IRS tax compliance efforts to raise $58 billion over the next decade to help finance Mr. Obama's health care measure. The money makes up for revenue losses stemming from lower-than-hoped estimates of his proposal to limit wealthier people's ability to maximize their itemized deductions.

The updated budget also would repeal an unintended tax windfall taken by paper companies that use a byproduct in the paper-making process as fuel to power their mills. The tax credits were never intended for paper companies, but now they could be worth more than $3 billion a year, according to a congressional estimate.

The budget would make permanent the expanded $2,500 tax credit for college expenses that was provided for two years in the just-passed economic stimulus bill. It also would renew most of the Bush tax cuts enacted in 2001 and 2003, and would permanently update the alternative minimum tax so that it would hit fewer middle- to upper-income taxpayers.

[partagus7]

Just because you hate Bush does not give you a right to ruin the country.

I read these posts and all I hear from Obama supporters is how Bush caused all this mess. Does it even occur to you that maybe, just maybe, Obama got elected because people wanted him to fix this mess we are in and not make it worse?!

Now we have put a Dem in the White house, elected a totally controlled Dem congress, and all they want to do is spend, spend, SPEND! And when someone calls them on it, all they want to say is, "He (Bush) started it!" I say, ENOUGH ALREADY! Stop with this notion that just because I'm mad at Obama's spending spree, that I must support the Republicans. That is not true and does not make the president look any better in my eyes.

Quit making things worse. Quit cooking numbers to try and make failed policies look better. Quit throwing out excuses instead of solutions. Do what we put you democrats in office for. And for god's sake please stop all this reckless spending!

Where the hell has common sense gone in this country? I could not be more disgusted with this congress or this president. Instead of people working for real solutions, all I see are power plays and efforts to take political advantage from this crisis. The ship is going down but instead of bailing out water and plugging the holes in the hull, our Congress and President would rather argue over who started this mess and work on plans to add more deck chairs.

Truely pathetic

[rhs648]

Wave the Monetary and Banking system a fond farewell you all.
Posted by quapawsix

And what will replace it? Money stuffed in our matresses. Another brilliant solution.

[Trust_me_]

Can anyone tell me if it is possible to spend your way into a profit.



So is it possible to borrow 50 cents on every dollar spent, then spend $1.8 T
and come out ahead ? The bill then becomes $2.7 trillion

If this plan works, why not just give acorn 20 Trillion dollars and really turn this thing around?

I am not kidding, why not go for broke if this model is the right model to start the recovery?

[Trust_me_]

hungry1968-15

Buddy, go out tonight and spend every dime you have, then borrow as much as you can and spend that too. then with draw you 401 k and spend it too. spend all of this money in vegas.

Now gamble your house and cars away, ask your mom for her money and gamble tht too.

Now steel your friends car and gamble it too.

Are you getting out of debt yet, when do you see this spending turn around your situation?

Thats right it cant work because it makes no sense!

[hungry1968-15]

laughable. One comment here states:
"Hopefully Obama's debt will at least make some progress on reforming healthcare and energy."
What??? More mass spending to make our health care on par with Cuba? Obama's "mass spending" will destroy our health care system. This should certainly help our debt problems!
Our country can't even run the postal service without debt and now, liberals want to run our health care? Control our health records?
Reforming energy? Of course, we all want massive taxation to pay for a weak, unfounded environmental theory. What is Obama's massive taxation? An additional $1.40 per gallon of gasoline, a mileage charge for every mile we drive, and, at least $600 per month for the average home energy usage. Obama's "energy reform" will strangle the middle class (that Obama vowed to protect), kill small businesses, and drive many large businesses overseas to avoid taxation.
Thanks, Obama for the dismal years ahead!
Posted by budmag06 at 8:34 PM : May 11, 2009





Where did you get this highly fabricated, unbelievably stupid, nonsense?

Oh wait - you're a Fox News watcher, right?

[Forbus56]

Apparently, CBS couldn't believe the "T-Word", either.

America will soon be like an elderly couple who finally come to the sad realization that the smooth-talking financial adviser has swindled them out of their life savings.

[louiville2]

Ummmmm... ONLY 1.8 Billion??? I'll take that!!

TYPO!!! IT'S 1.8 TRILLION with a "T"!!!!!!!!

THANKS BUSH!!!!
Posted by Ordflyer at 6:18 PM

Amazing CBS still hasn't corrected the billion to trillion, must be intentional.

Just like this dweeb blaming Bush for out of control pork a plooza democrat spending. Sure to send us into the abyss.

[gravyboat45]

Thanks, Obama for the dismal years ahead!
Posted by budmag06

You are...ahh...welcome...Please...ah...place all your money...ah...in the basket.

[budmag06]

That's TRILLION!!! The comments here linking Bush with Obama's mass spending of trillions are laughable. One comment here states:
"Hopefully Obama's debt will at least make some progress on reforming healthcare and energy."
What??? More mass spending to make our health care on par with Cuba? Obama's "mass spending" will destroy our health care system. This should certainly help our debt problems!
Our country can't even run the postal service without debt and now, liberals want to run our health care? Control our health records?
Reforming energy? Of course, we all want massive taxation to pay for a weak, unfounded environmental theory. What is Obama's massive taxation? An additional $1.40 per gallon of gasoline, a mileage charge for every mile we drive, and, at least $600 per month for the average home energy usage. Obama's "energy reform" will strangle the middle class (that Obama vowed to protect), kill small businesses, and drive many large businesses overseas to avoid taxation.
Thanks, Obama for the dismal years ahead!

[quapawsix]

Wave the Monetary and Banking system a fond farewell you all.

[toobigtofail]

the headline number 1.8 billion is an error

cbs news

fix that error

[Ordflyer]

Ummmmm... ONLY 1.8 Billion??? I'll take that!!

TYPO!!! IT'S 1.8 TRILLION with a "T"!!!!!!!!

THANKS BUSH!!!!

[rhs648]

correction

One way to benefit from these deficits is to purchase tax free municipal bonds. The government becomes indebted to you, you receive a good rate of return every year, and you receive your principal back when the bond matures. The icing on the cake is that you pay no federal or state taxes on the interest if you purchase tax free municipal bonds issued in your state. Tax free municipal bonds are among the safest investments you can make. Instead of becoming indepted to the government, let the government become indepted to you. Government has the ability to raise taxes to make certain that you receive both your principal back and guaranteed interest earnings every year. That is quite a bargan.

[rhs648]

One way to benefit from these deficits is to purchase tax free municipal bonds. The government becomes indebted to you, you receive a good rate of return every year, and you receive your principal back when the bond matures. The icing on the cake is that you pay no federal or state taxes on the interest if you purchase tax free municipal bonds issued in your state. Tax free municipal bonds are among the safest investments you can make. Instead of becoming indepted to the government, let the government become indepted to you. Government has the ability to raise taxes to make certain that you receive both your principal back and guaranteed interest earnings every uear. That is quite a bargan.

[stephand]

Just last week we were told $17B is a lot of savings. The problem is the income just went down by 5x the amount. We all know you cannot spend more than you earn...

[ubrew12]

libRidiots said: "unemployment ... during Clinton...5.3 percent
unemployment... during Bush... 5.6 percent
... How's "uh-OH-bama" doing ,, 8.9 percent (announced 5/08/09)
1/20/2013 = end of the socialist nightmare "

Its fortunate that a majority of the American people have a better understanding of economics than you do. Recessions this deep take years of poor governance to manufacture. For those in the know, and in the majority, this is the 'Bush recession'. And it will likely be called the 'Bush depression' and take its place next to the Great Depression as a fitting tribute to the worst president America has ever known. If Obama's strategy of paying massive tax dollars to Wall Street banksters goes bad, as I think it will, then it'll be the 'Bush/Obama depression'. But you'll never get the word 'Bush' out of that phrase. It belongs there, and everyone knows it but a few economics-challenged troglodytes like yourself.

[jnbeaumont]

At least a gallon of hormoned induced milk is a $2.51 at Wal-mart,What kind of crap is this? It's 1.8trillion clam not billions.Send your reporter to the eye doctor.

[paullyle]

I'd be overjoyed if the deficit was $1.8 B, but I think your headline should read $1,8T...darn!

[specialty8]

Thanks masses, i suppose trickle up does really work after all.

[specialty8]

themasses,
Are you sure they won't mess up the glossy surface of Jimmy, I want it to put right beside my picture of Obam since they were cut out of the same cloth?