OMB Releases Mid Session Review
The OMB released its Mid-Session Review today (see our press release here), showing slightly improved deficit numbers for this year, but still an alarming outlook over the next decade. They estimate that deficits will total about $8.47 trillion over the next ten years, about a $100 billion improvement over their projections in the President's budget in February. Debt held by the public is projected to reach $18.5 trillion or 77.4 percent of GDP.
In the short term, the deficit picture has both improvement and deterioration from February. The 2010 deficit number, $1.47 trillion, has improved by about $60 billion due to lower than expected unemployment, desposit insurance, and discretionary outlays, along with high than anticipated TARP repurchases (follow TARP repurchases on Stimulus.org). On the flip side, 2011 looks worse, with a deficit eerily similar to 2010 at $1.42 trillion. This is mostly due to lower projected revenues, but also due to the health care law and other legislative changes made since February.
|Billions of Dollars
|Percent of GDP|
Over the longer-term, the deficit and debt trajectory looks relatively similar to how it did in the President's budget. The deficit will come down from its high this year, declining to a low of $698 billion (3.8 percent of GDP) by 2014. Then, as the recovery is fully in place (hopefully) and the effects of the baby boomers start to kick in full force, the deficit increases, especially towards the end of the decade, up to $900 billion (still 3.8 percent of GDP) by 2020. Unfortunately, our goal isn't to stabilize the deficit as a percentage of GDP.
Overall, though, the outlook remains the same: gloomy. We have to get going on a plan to make these numbers significantly better.
Check out our press release on the Mid-Session Review and be sure to check back with CRFB next week for more on this subject.