CBO Updates Budget Deficit to $1.845 Trillion for 2009

Since the Congressional Budget Office (CBO) last issued its baseline projections in January 2009, the outlook for the budget deficit has deteriorated further. Enactment of stimulus legislation and omnibus appropriations, a worsening of the economic outlook, and other factors have increased CBO’s projections of the deficit by more than $400 billion in both 2009 and 2010 and by smaller amounts thereafter. As a result, if current policies remain the same, CBO now anticipates that the deficit will total almost $1.667 trillion (using the CBO baseline projection format). After updating its own baseline projection, CBO then analyzed the president’s budget for 2010 that contains further budget provisions for the current year which ends September 30, 2009. (By law, CBO’s baseline projection assumes that whatever laws are currently in effect will remain in effect. Therefore, the CBO’s baseline projection does not take into account the budget changes proposed by the president.) The CBO runs a separate analysis of the president’s budget to determine the projected deficit using the president’s proposals. Assuming that the changes proposed by the president are, in fact, enacted, CBO estimates that the 2009 budget deficit will total $1.845 trillion for the current year.