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Budget Deficit Projections Raised To $9 Trillion Over Next Decade

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Per Politico, the White House claims that “more than half of the projected deficits over the next 10 years are directly attributable to the previous Administration’s failure to follow the pay-as-you-go principle.”

But even if that’s true, which is likely given the Medicare drug benefit, the Iraq and Afghanistan wars and the expansion of the Pentagon’s budget since 9/11, how likely is it that voters will believe that come 2012? Especially when he passed a $787 billion stimulus plan?

NY Times has more…

WASHINGTON — The Obama administration, citing an economic downturn that has been deeper than it had first thought, raised its estimate on Tuesday of the government’s deficit over the next decade to $9 trillion from $7.1 trillion.

The Office of Management and Budget also said that it expected the economy to contract 2.8 percent this year, substantially more than previously estimated, and that employment would peak at around 10 percent.

But the CBO has substantially different numbers…but there’s a reason for that…

Analysts at the Congressional Budget Office put their 10-year deficit estimate slightly lower, at $7.14 trillion, though the agency uses a slightly different method to reach its number. The budget office takes into account only policies already in place, while the administration can consider policies and budget decisions that it hopes to install.

And some less bad news on our budget deficits…

White House officials predicted that the budget deficit this year would peak at $1.58 trillion, though they said the 2009 shortfall would be about $261 billion lower than they had predicted in May. The main reason is that officials have decided that they will not need another round of bailout money for the nation’s banks. The Congressional Budget Official also estimated a deficit this year of about $1.6 trillion.

So we didn’t spend a quarter of a trillion we thought we might have to because the banks have pulled out of their rut, but still…wow. Again, I think this would be a lot easier to blame on the Bushies had Obama not requested the stimulus and wasn’t trying to reform health care.

Which opens up the question: will the debt and our budget deficits be THE key story in 2012?

More as it develops…