There are a number of ways to look at today’s budget numbers. The White House, for instance, wants to focus on the idea that the fiscal year 2011 deficit is projected to be lower than the 2010 deficit. But that was largely expected already based on the assumptions that stimulus spending would wind down down, the economy would be better, and much of the Bush tax cuts would expire. That’s why I think a good way of looking at today’s announcement is: how does it stack up against what the Obama administration was projecting last year?
It turns out that in the budget it announced last February, the White House Office of Management and Budget projected cumulative deficits of $6.97 trillion for fiscal years 2010 through 2019, but in the budget it announced today, the comparable number swelled to $9.09 trillion — or an increase of about $2.1 trillion. In fiscal year 2011 alone, the deficit is now projected to be $1.27 trillion, compared to the year ago estimate of $912 billion — an increase of $355 billion for next year alone.
In its mid-session review last August, the Obama administration had already revised some of its earlier forecasts upward. Today’s projections tend to be higher than the August estimates in the first few years of the budget window, and then a bit lower in the later years. Overall, today’s estimates for 2010 to 2019 are still higher by $35 billion than what was projected in August.
As far as the cumulative debt held by the public, it’s now projected to reach a staggering $17.5 trillion in 2019, compared to an estimate of $15.37 trillion a year ago.
I put together the chart below to demonstrate how today’s estimates compare to last February’s projections by the OMB.