Federal Deficit Lower Than White House Projection
Unnamed administration officials quoted by David Cho of The Washington Post say the federal deficit is lower than the White House’s initial projections. The budget gap for the first six months of the year is eight percent lower than estimated; were the trend to continue, the annual deficit would be $300 billion lower than initial estimates. The officials cited higher tax revenue and lower spending on the financial-system bailout as the reason for the improved numbers.
But other White House officials — namely Kenneth Baer, spokesperson for the Office of Management and Budget — expressed dismay at the tentative data, calling it “premature and irresponsible.” The annual deficit figure is not due to come out until late summer. The new estimate sets a higher bar for the White House to clear, and is based on higher tax-withholding by employers in March and April (a positive sign, but a preliminary one) and lower spending on helping the financial sector (premature, particularly given the possibility of housing market troubles later in the year).
Still, using Office of Management and Budget data, I created a graph to show just how much lower the annualized projection might be, and presumed similar savings in the coming years. The blue line is official White House data, either confirmed or projected; the red shows the estimated savings.