CBO: Deficit to Hit $1.2 Trillion

Well, I guess we knew this was coming…

The 2009 federal budget deficit is projected to be $1.2 trillion, the Congressional Budget Office announced today — NOT INCLUDING THE ECONOMIC STIMULUS PACKAGE EXPECTED TO ARRIVE EARLY NEXT MONTH.

From USA Today:

In the first official reckoning of the damage caused by the severe recession, the report paints a bleak picture for 2009: a 2.2% drop in the size of the nation’s economy, a jump in the jobless rate to 9.2% in early 2010, a 14% drop in home prices and a 1% decline in consumption.

Most economists agree that the deficit spending is necessary to pull the country through the recession. Still, the deficit as a chunk of the gross domestic product — which CBO expects to hit 8.3 percent — should alarm some folks. Not even President Ronald Reagan, who spent wildly throughout the 1980s in the name of smaller government, ever ran deficits topping 6 percent of GDP.

Lawmakers are furiously shooting out statements in response to the news. House Speaker Nancy Pelosi (D-Calif.) is blaming the “fiscal mismanagement of the Bush administration.” Senate Minority Leader Mitch McConnell (R-Ky.) says the figure is a “stunning and sobering reminder” that Democrats should tread carefully as they craft their economic stimulus package. All parties, of course, share some blame. It was, after all, Congress under both Republicans and Democrats to approve the deficit-laden budgets of the last decade.

And how much is $1.2 trillion? Well, if you stacked $100 bills on top of each other, you’d have to find a ladder nearly 830 miles tall to place the top bill on a $1.2 trillion pile.

Indeed, the only bright spot in this dismal tale is also meaningless: The CBO report is signed by Acting Director Robert A. Sunshine.