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 8 percent lower than estimated. Were the trend to continue, the annual deficit would be $300 billion lower than initial estimates. Officials cited higher tax revenue and lower spending on the financial-system bailout as the reason for the improved numbers.
But Obama Administration spokesperson for the Office of Management and Budget Kenneth Baer 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.
It’s worth noting again, given the rise of the Tea Party and the incessant often ugly clatter among Republican lawmakers, the plunging trajectory of the deficit during the Bush years, when nary a peep was raised about “mortgaging our grandchildren’s future” or “spending our children’s money.”