On Monday, The White House revised downward its forecast for budget deficit for the fiscal year that ends in September. The White House slashed its estimate to $759 billion, or 4.7% of GDP, from its April forecast of $973 billion or 5.3% of GDP. The 2013 fiscal year will be the first of President Barack Obama’s presidency without a deficit in excess of $1 trillion.
The new figures reflect additional revenues generated by the improving economy and take into account automatic, across-the-board spending cuts that the White House had hoped to avert. Nevertheless, the new estimate is still not as small as Congressional Budget Office (CBO) is predicting.
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New White House estimates are showing a smaller budget deficit for the fiscal year that ends in September — but still not as small as congressional number-crunchers are predicting.
In its mid-session review, the White House’s Office of Management and Budget said the budget deficit for the 2013 fiscal year will shrink to $759 billion, about $200 billion less than predicted three months ago, as the economic recovery continues. That’s 4.7% of GDP.
Deficits are dropping thanks to both the improving economy, which brings in more revenues, and a tax increase on the wealthy that went into effect this year.
Obama and congressional Republicans have argued over how best to replace the sequester, but remain at loggerheads. Many in the White House reportedly see the end of this fiscal year as probably the last chance for Obama to scale back the sequester before the 2014 midterm elections.