CBO estimates $9.8 trillion in deficits over 10 years

By Vicki Needham – The Hill

The federal government would record total deficits of 9.8 trillion between 2011 and 2020 under President Obama’s fiscal 2011 budget, according to an analysis released Wednesday on the by the Congressional Budget Office.

The deficit would be $1.5 trillion in 2010 and and would decline to 8.9 percent of gross domestic product or $1.3 trillion in 2011, $346 billion more than the deficit that CBO projects in its March 5 baseline, based on current policies and laws not changing.

CBO upped the 2010 deficit projections by $20 billion in 2010 and reduced overall estimated deficits by $57 billion between the 2011-2020 period from earlier estimates.

Also, under the president’s budget debt held by the public would grow from $7.5 trillion or 53 percent of GDP at the end of 2009 to $20.3 trillion, or 90 percent of GDP, at the end of 2020, about $5 trillion more than under the assumptions underlying the baseline.

The analysis also found that revenues would be $1.4 trillion, or 4 percent, below CBO’s baseline projections from 2011 to 2020, mainly because of the president’s proposals to index the thresholds for the alternative minimum tax for inflation starting at their 2009 levels and to extend many of the tax cuts from 2001 and 2003 scheduled to expire at the end of the year. Other proposals in the budget, including changes to the healthcare system would increase net revenues.

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