New estimates from the White House on Friday predict the budget deficit will reach a record $1.47 trillion this year. The government is borrowing 41 cents of every dollar it spends.
That’s actually a little better than the administration predicted in February.
The new estimates paint a grim unemployment picture as the economy experiences a relatively jobless recovery. The unemployment rate, at 9.5 percent now, would average 9 percent next year under the new estimates.
While there’s a slight improvement in the deficit for the current year, next year’s predicted $1.42 trillion worth of red ink — that’s 37 cents of borrowing for every dollar spent — is looking worse. It’s about $150 billion more than previously predicted, because of still-slumping tax revenues.
White House budget director Peter Orszag said the numbers represent a “fiscal situation that requires attention.”
Deficits have skyrocketed since the recession took hold in 2008 and Congress responded with a bailout of the financial system and last year’s $862 billion stimulus measure.