Washington — Just weeks before the government's fiscal year ends Sept. 30, the nonpartisan Congressional Budget Office on Tuesday projected a near-record federal budget deficit of $407 billion, sharply higher than White House projections six weeks ago and more than double last year's figure.
Mammoth federal-budget deficits feed inflation, make America dependent on foreign lenders, cost taxpayers hundreds of billions of dollars in interest payments on the growing national debt and drain capital savings from more productive investments.
The widening gap between what the government spends and the revenue it brings in is sure to weigh on the next president and impede his efforts to spend on new or larger programs or to cut taxes.
The CBO also offered a dismal forecast Tuesday, projecting a record deficit of $438 billion in the coming year due to the slowing economy, which would reduce tax receipts to the Treasury.
That fiscal 2009 deficit could rise another $83 billion if Congress, as expected, adjusts the alternative minimum tax. The deficit projection also doesn't include the potential costs to taxpayers from last weekend's seizure of mortgage-finance giants Fannie Mae and Freddie Mac. The CBO had estimated a takeover cost of $25 billion, although financial experts suggest that it could exceed $100 billion.
The CBO's latest estimate for fiscal 2008 is $18 billion higher than the Bush administration's projection six weeks ago. The record is $413 billion in fiscal 2004. Fiscal 2007's deficit was $161 billion.
"The significant expansion in the deficit is the result of a substantial increase in spending and a halt in the growth of tax revenues," the CBO said.
Comments
PosseComitatus 5 years, 7 months ago
I am not trying to say that the president is without fault in this mess. I was only trying to make a simple point that one person alone did not do this.
ASBESTOS 5 years, 7 months ago
Clinton help[ed with the above mentioning of the "Financial Modernization" act.That was what started the modern mortgage meltdown.If a democrat let's a camel's nose under a tent on regulation, a republican will invite the entire camelSo bothe the Dems and the GOP need to do whqat they say,not selling out the country to lobbyists.
powershopper 5 years, 7 months ago
Assbestos - Hard not to blame Bushco isn't it? When Clinton took office, his administration balanced the budget and eliminated the American deficit. Now that Bush is in office we have the largest deficit in HISTORY. Who should I be blaming? Santa Clause?
coltrane 5 years, 7 months ago
the economy Bushwhacked by America's 'pre-emptive' war supported by Senator Pat Roberts and bogus liesabout WMD.guess where all the money went?wall street & military profitstypical RepubliKLAN lies
RETICENT_IRREVERENT 5 years, 7 months ago
"The deregulization of the mortgage and finance industry under Bush has been a key factor to the mortgage crisis we have today." - beaMaude, Maude, Maude,Remember it was Bill Clinton who pushed, supported, and signed the legislation that basically repealed the Glass-Steagall Act of 1933 by signing in the Financial Services Modernization Act, and Clinton pressured for change of the Community Reinvestment Act, allowing the securitization of CRA loans containing subprime mortgages. Clinton personally intervened broke the deadlock in Congress allowing this bill to be passed, and then signing it.
beatrice 5 years, 7 months ago
One more thought for both you and me -- this is all happening, and what was the topic of the day? Lipstick. The problems of our nation are bigger than the little things we too often focus on. It is time to tackle the bigger issues, and I do think that the deficit and the national debt are the biggest of them all. Let us hope and pray that whoever is elected really will be an agent for change, and lets hope that we all will do our part to help.
beatrice 5 years, 7 months ago
Asbestos, I think you and I are actually in closer agreement on this issue than you might realize. Please believe me when I say that I don't hate George W. Bush. He is our President, and I have always wanted him to do a great job for all of us. I simply do not believe that he has, and this latest debacle is proof once again. My point was one that goes beyond party. People have for some time now been calling Obama a "Socialist," yet look at what Bush and the current administration has been doing! To argue that Bush isn't responsible is to argue that the President has no control whatsoever over our government and economy -- that he is a figurehead. That simply isn't true. The deregulization of the mortgage and finance industry under Bush has been a key factor to the mortgage crisis we have today. It is one thing to allow companies the opportunity to grow, but once they are international corporations that only respond to stock holders, do you think they give a damn about the nation? Then, we -- meaning "they" the politicians -- bail them out, on our dime. The national dept and the budget defecit have been allowed to go virtually unchecked and ignored under Bush -- and I'm not saying that as an attack on Bush. Congress is clearly to blame as well. There hasn't been a checks and balances between Congress and the President for most of his administration, and just now the Dems have a razor thin chance of being that balance, and they have been too damn weak to really use it, which I find greatly disappointing. McCain has been part of this system for a very long time, and only recently has he been running as the anti-Republican Republican. Well I'm sorry, but if he was so dead set against the failed economic policies that have led us to this point, why haven't we heard more from him and his opposition to Bush much earlier when he could have actually done something about it? Just know that when you see something like this bail-out happen, it should be clear to all that Obama isn't the Socialist, and it isn't just the Democratic Party -- nor is it just the Republicans. It is the politicians and their lobbyists, and they all need to answer. Is Obama the one who will fix all of our problems? Hell no. Nor should he or McCain be expected to fix it all. But I do believe Obama will actually do more to fix the system than will McCain. His change will be one that doesn't give the upper hand to the business, while McCain still will. And business greed is what has led us to this point. However, be it McCain or Obama, the debt and deficit is something that needs to be confronted and can no longer be ignored. As a fellow American, I hope you will agree with me on that. Divided, we will certainly fail.
Pilgrim 5 years, 7 months ago
acoupstick (Anonymous) says:"Cutting taxes will actually increase receipts."Based on what evidence? Does this actually happen or is it purely an academic excercise? I tend to think that statement is hogwash, but I could be persuaded otherwise by proof.*******http://www.opinionjournal.com/columnists/pdupont/?id=110008022
ASBESTOS 5 years, 7 months ago
This is much worse, the B and S bailout, is $120 billion, add in the freddie and fannie that is 1.12 TRILLION in bailouts this year, with B and S being .12 trillion.
ASBESTOS 5 years, 7 months ago
Bea, damnit, look past "Bush Hatred", the Freddie and Fannie bailout is orders of magnitude worse and the combined Senate and House voted for this damn thing.Outrage of Bush is not the answer. Other politicians have been "bailing out" industry, the airlines, car makers, etc., depending on just whom was in power.This one is different, the President did not do this, CONGRESS DID!The people we sent to washington did this.
ASBESTOS 5 years, 7 months ago
"multiple no-bid contracts with a total value of 13 billion dollars."I am talking 1 of 2 TRILLION dollars, not tens of billions. THAT is the cost to us.PLease get it in perspective how in danger our country is inand neither party is the "saviour", and both are to "blame">The story of the year, the Freddie and Fannie bailout, and we are talking about Palin's "religion" and Obama's "lipstick remark" and Bush haters are talking about "Halliburton" and Obama haters are talking about him being "muslim".And NOTHING is said about ILLEGAL IMMIGRATION, SECURING OUR COUNTRY'S BORDERS.and NothingNOTHINGNOTHING is said at all for a 1 to 2 TRILLION DOLLAR BAILOUT!!!!!NOTHING!!!!!!Does anyone understand a one year 1 trillion dollar addition to our budget?$14,000 for every househole to buy out banks that made risky loans.NOTHING for PEOPLE!
beatrice 5 years, 7 months ago
After Bush bailed out Bear Stearns, we now have the government bailing out the country's housing mortgage industry.And Obama is the Socialist.Right.
ASBESTOS 5 years, 7 months ago
Powershopper give it up blaming only BUSHCO. IT is ALL the policticians slopping at the Fannie/Freddie mac trough, and it is "common knowledge" in D.C., that is where Bush 1 syncophant's went, that is where Clinbton 1 syncophants went, that is where AALLL D.C. syncophants go to regardless of party.BOTH Parties slopp at the trough, and who ever is in power majority gets the payoff, and the lobbyists know that. We go totally Democratic in leadership, THEY will get the money from the lobbyists, and when the GOP was in power THEY go all the money.Simple really, BLAME BOTH PARTIES for selling out the U.S. Citizen and bending over for lobbyists showering them with money.
ASBESTOS 5 years, 7 months ago
Yes and to reiterate so you get it, that $1 TRILLION is ADDITIVE to the current budget shortfall cause by overgrown spending, the Iraq was and just palin bad decisions and lack of leadership in either party in Washington D.C.Blaming one partyo or the other is fruitless and will solve nothing, BOTH ARE TO BLAME because they accept lobbyists money!
powershopper 5 years, 7 months ago
In example - When the United States invaded Iraq, KBR/Halliburton was awarded multiple no-bid contracts with a total value of 13 billion dollars. VP Cheney is the former CEO of Halliburton. While legally divested from Halliburton, it is unrealistic to say he still didn't have a "vested" interest in the success of his former company. In this case, considering it was no-bid contracts which were awarded, Bush metaphorically pulled out his checkbook and wrote a very large check.Billions of dollars from these no-bid contracts, to this day, are still unaccounted for.
ASBESTOS 5 years, 7 months ago
The CBO drastically underestimates the Freddie and Fannie bailout numbers.This bailout alone, supported by lobbyist corrupted politicials in the Democratic Party and Republican party will be at least $1 Trillion, not $100 Billion!Look at the Senators on the "gimmie list" from the Freddie and Fannie lobbyists who were in the top five in the highest totalsSen. Chris DoddSen. John KerrySen. Hillary ClintonSen. Barak ObamaSen Dodd was on the "oversight" committee on Freddie MAc and Fannie Mae.Now to be fair there were lots of support in the GOP as well, but the ""ones in power get the money" and the GOP slopped at that trough until they lost control of the committee chairmanships.However this could go as high as $2.5 TRILLION dollars as Freddie and Fannie have a portfolio of will over $5 Trillion and 50% of those loans they "packaged" are write downs.So Yes taxpayers we are picking u the tab on another bailout.This particulare bailout is in one year more thatn the TOTAL of the Iraq war.This shows that whoever is in power is not doing a dmn thing for AMERICANS and they are working for LOBBYISTS.IT is either time to shot lobbyists or shoot Senators.Neither are looking out for you or me or any other Americans.Revolution anyone? Revolt agains Democrats AND Repbulicans as they are out of touch with the American Citizen!!!!
powershopper 5 years, 7 months ago
Posse - The executive branch controls the Office of Management Budget (OMB) which controls the distribution of funds to various federal departments and agencies. The POTUS is in charge of the executive branch. Ultimately, the POTUS is responsible for the fiscal health of the nation, much like the CEO of a publicly traded company is to its shareholders.
george_nye 5 years, 7 months ago
The rightwingers are getting drunk and cleaning thar guns....cuz they is men...who need gunz.....
acoupstick 5 years, 7 months ago
"Cutting taxes will actually increase receipts."Based on what evidence? Does this actually happen or is it purely an academic excercise? I tend to think that statement is hogwash, but I could be persuaded otherwise by proof.
Defender 5 years, 7 months ago
Where are the rightwingers?
RedwoodCoast 5 years, 7 months ago
I'mma carin 'bout ma droor pockets more thin I'mma carin 'bout ma kuntree. Sacrifice ma rear!
RedwoodCoast 5 years, 7 months ago
Yee-haaaw. I'm votin Ripublickin. They gonna put mo money in the pockets o' ma droors. Who carez how we gonna pay fer thangs.
tangential_reasoners_anonymous 5 years, 7 months ago
ssssssss
tangential_reasoners_anonymous 5 years, 7 months ago
But... money grow on shrubs, doesn't it?
SandyMorgan 5 years, 7 months ago
I blame Palin. Google bridge to nowhere. She was for it, spent the money on other stuff. She'll probably vote for it again, take the money again, and on and on.Obama and Biden always vehemently oposed it.
george_nye 5 years, 7 months ago
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Tony Kisner 5 years, 7 months ago
What if the US just files for bankruptcy? I think we need to start over. Next time just don't use credit cards unless it is an emergency.
Flap Doodle 5 years, 7 months ago
I blame the twin earmarking kings, Obama & Biden.
PosseComitatus 5 years, 7 months ago
I didn't know the President had the checkbook. This problem is way bigger than one person.
george_nye 5 years, 7 months ago
Yeah- thanks to all the republicans....thanks a lot.I bet they feel NO REMORSE at all....they don't care.
Defender 5 years, 7 months ago
I thought that Bush and all the ultra rightwingers said that the deficit would be going down, and quickly? You mean they were wrong? Just goes to show what you get when you're goverened by extremists, regardless if they are left or right.Tom, RR, invictus, and all you folks that have supported this government, what do you have to say for yourselves? Why do you support liars?Wait, I know the answer to my last question. You guys HATE America, that's why you're trying to ruin it.
texburgh 5 years, 7 months ago
The Bush legacy that will be passed on for years to come. Thanks to W's purposeless war we may be saddled with debt for generations. As one bumper sticker said at the start of the Iraq invasion - "Our long national nightmare of peace and prosperity has come to an end." lMcCain? He supports Bush economic policies; he is absolutely giddy over the war and wants us there for years; he chuckles and sings, "Bomb Iran" to the tune of Barbara Ann. What is McCain but a recipe for continued disaster. More years of Bush. It's time for a change in the White House.
kansas778 5 years, 7 months ago
Cutting taxes will actually increase receipts. The problem is the out of control spending. Cuts need to be made across the board, and entire departments and programs should be scrapped.
RETICENT_IRREVERENT 5 years, 7 months ago
autie,Nancy say's that a second economic stimulus is needed, but she's not sending you another check.
SandyMorgan 5 years, 7 months ago
It's about to get worse, thanks to Freddie AND fannie. This needs to be investigated.
autie 5 years, 7 months ago
So why doesn't George send me another check? didn't that fix it last time? He could extend tax cuts too..that will fix it. Or quit throwing billions down the drain in Iraq and raise taxes..that might make more sense..not an economist mind you, but doesn't it make sense to increase income and reduce expenditures when you sheet is that far out of balance?
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