This morning, January 26, the Congressional Budget Office (CBO) released new projections showing that–if current laws and policies remained unchanged–the federal budget would show a deficit of $1.3 trillion for fiscal year 2010.
That’s what passes for good budget news these days. The new estimate is down $80 billion from the budget office’s previous estimate.
Of course, as a percentage of the economy (as measured by GDP) the deficit would be the second largest since World War II.
And in the big debt picture an $80 billion swing is barely a drop in the bucket. The CBO projects that total (on budget) federal government debt will reach $8.8 trillion by the end of 2010.
But wait, the news gets better. (Well, maybe not better. How about ‘funnier if it weren’t so important?”)
Shortly after the CBO released its estimate for the 2010 debt, the U.S. Senate rejected a proposed bipartisan commission to recommend ways to reduce the U.S. government deficit by a vote of 53-46. The legislation, which required 60 votes to pass, would have required that the panel’s recommendations be voted on by Congress without being amended.
The bill’s sponsors Kent Conrad (D) and Judd Gregg R) argued that Congress has proven it is incapable for making the difficult decisions needed to reduce the deficit.
Lobbying against the bill came from both ends of the political spectrum. Americans for Tax Reform opposed the measure, saying that the bill would increase taxes. The AFL-CIO protested that the bill could mean cuts in programs such as Social Security and Medicare.
Hard to see a way to reduce the deficit if raising taxes and cutting spending are both off the table.