CBO Projects Larger Budget Deficits

The Congressional Budget Office last week estimated budget deficits for the current Fiscal Year 2009 will be $1.8 trillion and for Fiscal Year 2010 will be $1.4 trillion. The White House had estimated the numbers at $1.75 trillion and $1.2 trillion, respectively. The previous deficit record, set last year, was $459 billion.

Over the next ten years, the deficits will total $9.3 trillion, according to CBO. The White House had estimated $7 trillion.

Why the difference? The Wall Street Journal explains:

One main reason for the difference in budget estimates is a difference in economic forecasts, with congressional views of long-term growth less optimistic than those of the White House — in part because of the long-term effects of so much government borrowing. The White House said its projection is more in line with those of private-sector economists. Congressional forecasters also use different accounting rules that tend to be more conservative.