On Thursday the White House released its annual “Mid-Session Review” review, which estimates the amount the federal government will take in and spend over the next 10 years. The review also projects the size of federal deficits and debt over the next decade.
The report had some good news. In the President’s fiscal year 2012 budget proposal, which was released in February, the White House estimated the fiscal year 2011 deficit would total $1.645 trillion. It now estimates this year’s deficit will only reach $1.316 trillion, a $329 billion or 20 percent improvement. The White House says this decline is due to larger-than-expected revenues (money coming into the U.S. Treasury from tax and tariff payments) and lower-than-expected federal outlays (spending). Further good news is that, over 10 years, the deficit is expected to be $1.45 trillion lower than was estimated in the February budget release. That improvement is due in large part to the recently passed Budget Control Act, which slowed the rate of federal discretionary spending growth over the next decade.
The White House’s estimate for this year’s budget deficit is very close to the Congressional Budget Office’s recent estimate, which also projected the fiscal year 2011 deficit will come in around $1.3 trillion.
While the budget deficit numbers are moving in the right direction (it’s expected to fall from $1.316 trillion in fiscal year 2011 to $568 billion in fiscal year 2021), this positive report does not mean Washington’s work is done. Between fiscal year 2011 and 2021 deficits are still expected to total more than $7 trillion. Furthermore, our national debt will likely be $24 trillion by 2021.
Finally, the White House revised down its yearly economic growth projections and revised its annual unemployment estimates up. If this report shows anything, it’s that huge deficits and soaring debt are not helping the economy. It’s time to reverse course.
