CBO: Deficit to Decrease to $331 Billion

In its latest Budget and Economic Outlook the CBO expects the deficit to decline to $331 billion for 2005. This would be an $81 billion decrease over the 2004 deficit.

CBO now expects the 2005 deficit to total $331 billion—an $81 billion decline from the deficit recorded for 2004 (see Summary Table 1). Relative to the size of the economy, the deficit this year is expected to equal 2.7 percent of gross domestic product (GDP), down from 3.6 percent in 2004.

Part of the reason for this is an increase in revenues. The $85 billion dollar increase in revenues is primarily due to a surge in corporate income tax payments.

Despite this good news the CBO has not substantially altered its long term forecast in regards to the fiscal outlook. Budget deficits are projected out till 2015 where the deficit is projected to be $57 billion or about 0.3% of GDP.

In regards to the economic outlook the CBO is projecting healthy growth for the rest of 2005 and into 2006. The growth rate of GDP is projected to be 3.7% in 2005 and 3.4% in 2006.

FILED UNDER: Economics and Business
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.

Comments

  1. RA says:

    If I had a dollar every time these people were wrong, I could comfortly retire today. Its time we fire these socialists and get Arthur Laugher in there.

  2. Jim Durbin says:

    Let’s not forget that the deficit is also masked with the money from the Social Security Surplus.

    I guess it’s too much to ask a Republican President to take the political hit and admit the deficit is higher than reported or just taking the money straight from the Social security fund and admitting there is no Social Security surplus.

    Of course, this means Clinton never had a surplus.

    Sigh – where’s a fiscal conservative to go?

  3. Steve Verdon says:

    Sigh – where’s a fiscal conservative to go?

    Well not to the Republicans.

    Its time we fire these socialists and get Arthur Laugher in there.

    Never heard of him…oh you mean Arthur Laffer. Oh well, he probably isn’t interested at 64 and living, last I heard, in San Diego. Who’d give up that nice weather for the crap they have in DC (sorry James, no offense, but that humidity was murder).