From Politico, "More Red Ink: CBO Projects $1.35 Trillion Deficit":
New deficit estimates Tuesday project a $1.35 trillion shortfall for the coming year even as Congress debates creation of a bipartisan commission to propose long-range steps to relieve the mounting debt facing the nation.And Obambi's trying so hard!
The 2010 deficit projection is only modestly less than the $1.4 trillion wave of red ink that the government experienced in 2009, as revenues continue to lag with the slow economic recovery forecast by the Congressional Budget Office.
Even in 2011, the Congressional Budget Office is projecting a nearly $1 trillion shortfall, and that picture could well be worse depending on the costs of the war in Afghanistan and what Congress decides on long-term tax policy.
CBO projects that unemployment will average slightly above 10 percent in the first half of 2010 and then turn downward in the second half. But the building debt carries with an added burden. Once the economy improves, CBO says, higher interest rates will come back and bite the Treasury trying to finance the accumulated deficits.
“Interest payments on the debt are poised to skyrocket,” CBO says. From 2010 through 2020, it projects the annual costs will triple in nominal terms from $207 billion to $723 billion and more than double as a share of GDP.
Release of the numbers came as the Senate was poised to vote before noon Tuesday on a proposal creating an 18-member fiscal commission empowered to force House and Senate action on deficit reduction steps after the November elections.
RELATED: At the Director's Blog, "CBO Releases the Budget and Economic Outlook: Fiscal Years 2010-2020" (via Michelle, "Fill in the blank: Obama proposing spending freeze is like…").
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