WASHINGTON (AP) The Obama administration expects the federal deficit over the next decade to be $2 trillion bigger than previously estimated, White House officials said Friday, a setback for a president already facing a Congress and public wary over spending.
The new projection, to be announced on Tuesday, is for a cumulative 2010-2019 deficit of $9 trillion instead of the $7 trillion previously estimated. The new figure reflects slumping revenues from a worse economic picture than was expected earlier this year. The officials spoke only on the condition of anonymity ahead of next week's announcement.
Ten-year forecasts are volatile figures subject to change over time. But the higher number will likely create political difficulties for President Obama in Congress and could create anxiety with foreign buyers of U.S. debt.
Earlier this week, the White House revealed that it expects a budget deficit for the fiscal year ending Sept. 30 to be nearly $1.6 trillion. That figure was lower than initially projected because the White House scratched out $250 billion that it had initially added to the budget as a bank rescue contingency. The administration ultimately did not ask Congress for that money.
Still that number, together with the 10-year projection, represents a huge obstacle for an administration trying to undertake massive policy overhauls in health care and the environment.
Economists predict a slow recovery from the recession, further testing Obama's goal of cutting the deficit to $512 billion in 2013. Even as he seeks higher revenues to pay for new climate change and health care measures, the president could face pressure to increase revenues or make deep spending cuts to tame the deficit.
The new projection, to be announced on Tuesday, is for a cumulative 2010-2019 deficit of $9 trillion instead of the $7 trillion previously estimated. The new figure reflects slumping revenues from a worse economic picture than was expected earlier this year. The officials spoke only on the condition of anonymity ahead of next week's announcement.
Ten-year forecasts are volatile figures subject to change over time. But the higher number will likely create political difficulties for President Obama in Congress and could create anxiety with foreign buyers of U.S. debt.
Earlier this week, the White House revealed that it expects a budget deficit for the fiscal year ending Sept. 30 to be nearly $1.6 trillion. That figure was lower than initially projected because the White House scratched out $250 billion that it had initially added to the budget as a bank rescue contingency. The administration ultimately did not ask Congress for that money.
Still that number, together with the 10-year projection, represents a huge obstacle for an administration trying to undertake massive policy overhauls in health care and the environment.
Economists predict a slow recovery from the recession, further testing Obama's goal of cutting the deficit to $512 billion in 2013. Even as he seeks higher revenues to pay for new climate change and health care measures, the president could face pressure to increase revenues or make deep spending cuts to tame the deficit.
