The White House predicted Friday that the federal budget deficit will grow to $1.47 trillion this year. While the number is lower than earlier administration estimates, it is still a record, and the government is now borrowing $0.41 for every dollar spent.
The estimate reflects a debt-to-GDP ratio of 10%, down from the 10.64% predicted by the administration in February, according to usgovernmentspending.com, a Web site that provides historical and comparative information on the budget deficit.
In an update of the 2010-2020 budget presented to Congress, the White House’s Office of Management and Budget said the improvement in this year’s deficit was due to projected lower government spending.
The news service AFP reports expenditures for 2010 are now projected to be $118 billion lower than projected in February, totaling $3.6 trillion dollars, or 24.6% of GDP. The forecast reduction was due in large part to lower estimates for spending on unemployment and deposit insurance, and non-defense discretionary programs.
“Because of the lower outlays now projected for 2010, the deficit for 2010 is expected to be $1.471 trillion, $84 billion lower than projected in February,” the OMB said in the report to Congress known as the Mid-Term Review.
The review notes the 2010 deficit of 10% of GDP is about the same as the 2009 level. In fiscal year 2011, the deficit was projected to fall from the 2010 level to $1.416 trillion, or 9.2% of GDP. That was $150 billion higher than projected in February.
The OMB’s update showed the White House more upbeat about the 2010 economic growth outlook.
AFP reports the administration now forecasts GDP growth of 3.2% in 2010, up from a prior estimate of 3% in early May. High unemployment, a major stumbling block in the fragile economic recovery, was seen averaging 9.7%, down from the 10% forecast in February, the OMB said. The jobless rate currently stands at 9.5%.