CBO Projects A Trillion Dollar Deficit For The Fourth Consecutive Year

So much for getting those fiscal problems in order:

The U.S. budget deficit this year will be larger than projected while health-care costs aren’t growing as quickly as anticipated, according to the federal government.

The budget shortfall for 2012 will be $1.2 trillion, about $93 billion more than forecast two months ago, according to the nonpartisan Congressional Budget Office.

The increase is largely attributable to a reduction in workers’ payroll taxes for the rest of 2012, the cost of which lawmakers agreed to add to the federal deficit.

The revised estimate means the government will run a trillion-dollar deficit for the fourth consecutive year, though the gap will narrow slightly from last year’s $1.3 trillion.

“The fundamental story about the federal budget has not changed: Although the deficit is starting to shrink, it remains very large by historical standards,” the agency said yesterday in a report.

Nothing to see here folks, move along and go back to talking about Rush Limbaugh and contraceptives.

FILED UNDER: Congress, Deficit and Debt, Economics and Business, Quick Takes, US Politics
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. Tsar Nicholas says:

    Hell, that’s nothing. Remember that Social Security and Medicare both are off-budget items, and as we speak the Boomers are lining up in force to be fed at the troughs. Our actual fiscal situation is a lot worse even than that indicated by those horrific budget deficit figures. P.S. — Can you fathom the reaction among the usual suspects and the non-stop mass media coverage if we had four consecutive years of trillion-dollar budget deficits with a Republican in the Oval Office?! Yikes.

  2. Hoyticus says:

    If you’re actually all that concerned about the deficit this year as well as federal debt you should check out the simulator from The Committee For a Responsible Federal Budget and run through some scenarios. I find it interesting how much money you can save with just downsizing the wars/military spending and creating a national VAT.

    http://crfb.org/stabilizethedebt/

  3. Console says:

    Ah yes, the deficit. The most pressing issue in america today, and if we don’t act on it now we might have… uh… 5 percent inflation in 10 years… maybe.

  4. Ben Wolf says:

    Even when the economy fully recovers large deficits will be necessary until we address our CAD problems. The private sector’s only other option would be to again turn to credit, and we saw how that played out.

  5. Hey Norm says:

    “…the deficit is starting to shrink, it remains very large by historical standards…”

    So what does this all mean? It means that the curve is apparently being bent in the correct direction…including the health care cost curve.
    Funny that Tsar focuses on “…trillion-dollar budget deficits…” but is incapable of recognizing or acknowledging the importance of the spending tragectory. Republicans always increase the deficit. Always. But because Bush43 left massive continuing obligations they now can use the deficits they caused as a political bludgeon to hammer Obama with. Like most things Republicans say…there is little basis in fact to it.

  6. Liberty60 says:

    Republicans always increase the deficit. Always.
    This needs to be repeated about 1000

    Since Eisenhower, no Republican President, no Republican Congress, no Republican Senate has ever reduced spending.

    Ever. Not one.

  7. Gromitt Gunn says:

    @Tsar Nicholas:

    Can you fathom the reaction among the usual suspects and the non-stop mass media coverage if we had four consecutive years of trillion-dollar budget deficits with a Republican in the Oval Office?! Yikes.

    I imagine it would go something along the lines of a) Darth Cheney or his successor says, “Deficits don’t matter” every time anyone asks, b) Fox News runs a story on Tax Cuts Now, Tax Cuts Forever any time the masses start to get riled up, c) anyone who questions Endless War in public gets browbeaten for being an unpatriotic traitor, d) the Tea Party crowd goes back to hitting the early bird special on their Medicare-provided Hoverounds, and e) it remains a non-issue until the next Dem wins the White House.

  8. An Interested Party says:

    …it remains a non-issue until the next Dem wins the White House.

    Exactly…there’s a reason there were no official Tea Party groups while Bush was president…

  9. Rob in CT says:

    Funny how the tax plans of all the GOP candidates would make this worse, eh? Funny how the only GOP candidate who even pretends that he’d cut enough spending to balance his tax cut (but not improve on the status quo) is Ron Paul, who is hummin’ along at ~10-15% of the GOP primary vote.

    And Doug? The only reason we’re talking about contraceptives is that the GOP *freaked out* about them. In 2012. They just couldn’t help themselves.

  10. Hey Norm says:

    @ Rob…
    Yes…Romney’s tax plan explodes the deficit. But that’s nothing new.
    Look at this chart of spending suring first terms of the last 5 Presidents.
    http://dailydish.typepad.com/.a/6a00d83451c45669e20168e8c8fa5d970c-popup
    All Republicans do is create deficits. Yet we are supposed to listen to them on economic matters…and in their arrogance they pretend to be the only ones to listen to. What total f’ing BS. Fiscal frauds…the lot of them.

  11. Hey Norm says:

    Also…while I’m at it…
    Look at Reagan’s spending in that chart I link to above.
    Now imagine that Obama had spent that kind of money to get out of this recession. We would be looking at an entirely different economic landscape. As it is the Republicans have fooled everyone into being concerned about debt and deficits in the middle of a recovery…and now they are using the weak economy that caused…to bludgeon Obama. Romney is running around saying yeah we are recovering…but it would be faster with me as President. Well yeah…because you would spend money like a f’ing Republican!!!
    I generally think Obama is a pretty smart guy…but he let himself get totally f’ed on this.

  12. Franklin says:

    @Console: 5% inflation actually sounds kind of bad to me. And seeing as how I plan to be alive in 10 years, I think that worrying about what happens in 10 years is perfectly relevant.

  13. Ben Wolf says:

    @Franklin: Don’t worry about it. Our deficits are not sufficient to push demand beyond the economy’s productive capacity. Inflation from oil and food, yes. Inflation from government spending, not a chance.