As President Barack Obama works to get Congress and citizens behind his $3.4 trillion budget, the White House released revised deficit figures today that could make his battle harder. The administration now predicts that the deficit for fiscal year 2009 will rise to $1.84 trillion—$89 billion more than was estimated in February.
Underscoring that the deficits "are driven in large part by the economic crisis inherited by this administration," Obama's budget director, Peter Orszag, wrote in the Office of Management and Budget's blog this morning that the numbers were revised partly because the economy is recovering more slowly than expected. Overall federal revenue will be between $30 billion and $50 billion less for both 2009 and 2010 than the office had projected previously. "We also have more information about the severity of the financial crisis facing the nation, and this is reflected in new, higher estimates for the cost of financial stabilization efforts," Orszag wrote. Those kinds of efforts include billions in government bailout money, along with the $787 billion stimulus package.
The OMB projects that the deficit will fall sharply in fiscal 2010, which begins October 1, to $1.26 trillion. Obama has pledged to cut the deficit in half by the end of his tenure.