AP source: Federal deficit to reach $1.58 trillion for fiscal year
* By Philip Elliott, Associated Press Writer
* On Wednesday August 19, 2009, 8:33 pm EDT
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WASHINGTON (AP) -- The White House plans to announce the federal deficit is about $262 billion less than officials predicted earlier this year -- in part because the administration has provided less aid than expected to Wall Street.
The federal deficit this year will total $1.58 trillion, a senior White House official said late Wednesday. That's three times more red ink than last year. The official spoke on the condition of anonymity to discuss the report before its release next Tuesday while President Barack Obama will be on vacation in Massachusetts.
The nonpartisan Congressional Budget Office is expected to release its mid-session review the same day. It estimated in June that it expected a deficit of $1.825 trillion.
The report for the budget year that ends Sept. 30 also will predict Washington to spend $3.653 trillion this year, the official said. Revenue, however, would reach only $2.074 trillion.
The midsummer report was supposed to have been released in mid-July, but was delayed, leading to speculation the White House was delaying the bad news until Congress left on an August recess. Other administrations delayed releasing their versions of this report during their first year.
Obama's budget had included a $250 billion placeholder for a second bailout of the nation's troubled banks but did not ask Congress for it amid concerns the administration was spending too heavily. The administration also had anticipated more banks failing, but the survival of most banks saved billions for Washington.
The report comes during a rough patch for Obama's presidency. The rancor surrounding the Democrats' proposed health care overhaul came during a monthlong break when much of Washington is in a lull.
The administration earlier this year predicted that unemployment would peak at about 9 percent without a big stimulus package and 8 percent with one. Congress did pass a $787 billion two-year stimulus measure, yet unemployment soared to 9.4 percent in July and appears headed for double digits.
The nation's debt now stands at $11.7 trillion. In the scheme of things, that's more important than talking about the "deficit," which only looks at a one-year slice of bookkeeping and ignores previous debt that is still outstanding.
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