For fiscal year 2012 (which ends on September 30), the federal budget deficit will total $1.1 trillion, CBO estimates, marking the fourth year in a row with a deficit of more than $1 trillion. That projection is down slightly from the $1.2 trillion deficit that CBO projected in March. At 7.3 percent of gross domestic product (GDP), this year’s deficit will be three-quarters as large as the deficit in 2009 when measured relative to the size of the economy. Federal debt held by the public will reach 73 percent of GDP by the end of this fiscal year—the highest level since 1950 and about twice the share that it measured at the end of 2007, before the financial crisis and recent recession. Continue reading “An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022”
The compromise could add $4 trillion in debt in the next 10 years.
The White House-Senate Republican tax compromise could add almost $4 trillion in debt over the next 10 years, according to Congressional Budget Office estimates, which attribute most of the cost to lost revenues or payments on refundable tax credits.
The three-page table was released Tuesday even as House Republicans were meeting behind closed doors on the deal. And while the numbers can be understood only with some context, they could also spook deficit-conscious conservatives into demanding more spending cuts.
CBO begins its analysis from its March current law baseline that assumes all of Bush-era tax cuts would expire at New Year’s Day, and therefore gives no deficit-reduction credit for the fact that the deal begins to raise rates for the wealthiest Americans. Continue reading “The price tag: $4 trillion added to deficit”