Federal Deficit Estimated at Near-Record $407B

[one...two...tree 2,762]

By Lori Montgomery Washington Post Staff Writer

Weak revenue growth and accelerated spending -- including an economic stimulus package that returned billions to taxpayers -- will drive the federal deficit to $407 billion in the fiscal year that ends this month, more than double last year's $161 billion, congressional budget analysts reported today.

With the economy expected to remain sluggish for at least the next several months, the next president will take office facing a projected deficit of $438 billion, budget analysts predict -- the largest in dollar terms in American history, exceeding the previous record of $413 billion in 2004. And that number could easily climb above $500 billion if Congress acts, as expected, in the coming months to restrain the growth of the alternative minimum tax, budget analysts said.

In January, congressional budget analysts had estimated the deficit would be only $219 billion by year's end. This summer, however, the White House estimated that that number was likely to spike to $389 billion because of new spending.

http://www.washingtonpost.com/wp-dyn/conte...ml?hpid=topnews

..............

Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee, said, "The next president will be inheriting a budget and economic outlook that is far worse than most people realize." The burgeoning deficit "means more borrowing from China, more borrowing from Japan and more borrowing from oil exporters like Saudi Arabia," he said.

"Today's estimates provide the latest evidence of the fiscal legacy of Republican policies: record deficits and a weak economy," said House Budget Committee Chairman John M. Spratt Jr. (D-S.C.). "It's another reminder of the dismal economy and budget that Republicans are leaving others to sort out."

[HAL 9000 96]

Why don't we just top it off at $410B??

Can we get a discount?

I wonder how much those rebate checks that came this year will end up costing us down the road...

[peejay 327]

So where do we tighten the belt to trim the fat. But I digress. Which unnecessary over bloated programs do we need to cut to make room for the other unnecessary over bloated programs of the next administration and congress?

[one...two...tree 2,762]

So where do we tighten the belt to trim the fat. But I digress. Which unnecessary over bloated programs do we need to cut to make room for the other unnecessary over bloated programs of the next administration and congress?

Unlike a collaborative effort early this year to enact tax rebates for consumers and tax breaks for business, there's been virtually no good-faith negotiation between Democrats controlling Congress and the White House over the contours of a possible compromise.

Instead, the Democratic effort appears aimed in large part in casting Republicans — and GOP presidential nominee John McCain — as out of touch on the economy.

"Middle class families are not fools. They know that the economy is not strong," Schumer said. "But apparently the president, his Republican allies in Congress, and John McCain do not."

At the same time, new deficit and economic estimates released by the Congressional Budget Office on Tuesday brought fresh evidence of the nation's worsening fiscal picture and predictions of an economy that could slide into recession.

The federal government will run a near-record deficit of $407 billion this year, CBO said, with the deficit for 2009 reaching $438 billion — and could go even higher as the government takes over mortgage giants Fannie Mae and Freddie Mac and if Congress, as expected, devotes more than $60 billion to fix the alternative minimum tax to make sure more and more middle class families aren't hit by it.

The worsening deficit is largely due to continuing weakness in the economy, high energy and food prices, and the slump in the housing and financial markets, CBO said. And the economy could still slide into a recession, according to the forecast.

"The economy is likely to experience at least several more months of very slow growth," the CBO report said. "Whether this period will ultimately be designated a recession or not is still uncertain, but the increase in the unemployment rate and the pace of economic growth are similar to conditions during previous periods of mild recession."

The CBO predicts that the economy will grow 1.5 percent this year in real terms and slip to just 1.1 percent growth in 2009.

CBO's gloomy outlook was seconded by Harvard University economist Lawrence Summers and Allen Sinai, chief economist for Decision Economics, Inc., in testimony before the House Budget Committee.

"The state of the U.S. economy is a recession or recession-like conditions," Sinai said, adding that boosts in inflation could herald the return of the so-called stagflation experienced in the late-1970s and early 1980s.

Summers, a former secretary of Treasury in the Clinton administration, backed the idea of a second stimulus bill following the outlines proposed by Democratic leaders: aid to states; home heating subsidies; food stamps; infrastructure projects and unemployment benefits.

In all likelihood, Summers said, the U.S. economy is "a year or so away from a resumption of strong economic growth."

http://ap.google.com/article/ALeqM5jTvoimo...Q-nvoAD933EA7G0

[HAL 9000 96]

Get rid of the main contributors to that deficit- hardly social programs.

[Aubrey 10]

This film says it all.

http://www.IOUsathemovie.com/

I don't know why it doesn't occur to more people... but our national debt is a major security threat. Our nation is being bought out from underneath us, mostly by the Chinese. He who holds the money holds the power.

We can't cut taxes our way to a better economy. It's just like practically everything else in this country - our lawmakers are so short-sighted that they can't see the long-term harm they're doing. Let's keep drilling so we can delay moving to an alternative energy that will last. Let's keep spending like crazy and cutting taxes simultaneously (hello, wars, Medicare part D, and bridges to nowhere cost money). I for one want to see the Republicans and Democrats get on the same page -- cut useless spending AND keep taxes up enough to pay for what we need. They're both only half right.

I'll be moving to my SO's country when our country goes bankrupt and/or the dollar plunges into the worthlessness of the Peso... and all hell breaks loose.

[Ban Hammer 13,356]

I wonder how much those rebate checks that came this year will end up costing us down the road...

ditto

[HAL 9000 96]

I wonder how much those rebate checks that came this year will end up costing us down the road...

ditto

I guess we probably won't be the ones paying. I am sure that precious bun in the oven you kids have may have a different opinion than yours when he/she reaches tax age.

Edited September 10, 2008 by maviwaro

[Ban Hammer 13,356]

I wonder how much those rebate checks that came this year will end up costing us down the road...

ditto

I guess we probably won't be the ones paying. I am sure that precious bun in the oven you kids have may have a different opinion than yours when he/she reaches tax age.

what different opinion might that be? i've not offered an opinion on this thread.

[HAL 9000 96]

I wonder how much those rebate checks that came this year will end up costing us down the road...

ditto

I guess we probably won't be the ones paying. I am sure that precious bun in the oven you kids have may have a different opinion than yours when he/she reaches tax age.

what different opinion might that be? i've not offered an opinion on this thread.

yeah sorry about that.

point- the next generation will pay up unless we do.

[Dr. Obvious 49]

Time to call:

j/k

I was rolling this morning when I read the Democrats want to push a second stimulus package. I like money as much as the next guy, but where is this money coming from when we have such a ridiculous deficit??! Aiyiyi.

[HAL 9000 96]

Time to call:

j/k

I was rolling this morning when I read the Democrats want to push a second stimulus package. I like money as much as the next guy, but where is this money coming from when we have such a ridiculous deficit??! Aiyiyi.

Yes it IS a silly idea given those same reasons you mention. Of course, we COULD adjust the amount we waste elsewhere, like in the Middle East.