Record federal deficit forecast for 2009; tough choices ahead


** If you are looking for information on Minnesota’s current state budget deficit for 2009 –
check out our blog entry on the announcement of the $4.8 billion deficit. **

The federal deficit will hit a record $482 billion in 2009, according to Jim Nussle, director of the Office of Management and Budget. Factors behind the red ink cited by Nussle include the costs of the wars in Iraq and Afghanistan, tax rebates and a weak economy. The new deficit estimate is sharply higher than the administration’s $407 billion estimate made last February. The higher deficit will also mean increased interest payments on the growing national debt, which now exceeds $9 trillion.

This latest bad economic news comes as Congress prepares for important votes next year on whether to make temporary tax cuts from 2001 and 2003 permanent after 2010. It is becoming increasingly clear that making the tax cuts permanent is simply unaffordable. In fact, making the tax cuts permanent, along with adjusting the Alternative Minimum Tax, would cost $4.4 trillion over ten years…adding to our national debt that now exceeds $9 trillion.

– Steve Francisco

About Steve Francisco

Steve Francisco is the former federal policy analyst for the Minnesota Budget Project.
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One Response to Record federal deficit forecast for 2009; tough choices ahead

  1. Less than two months to the election, and John McCain and Barack Obama make daily promises and are promoting all sorts of programs and ideas to win over voters. Not only limited to presidential candidates, our representatives and the state and local levels also spend with abandon, thinking nothing of deficit spending and increasing the federal or state debt. The Committee for a Responsible Federal Budget is staging an intervention to end Washington’s addiction to debt and deficit spending. For more information, visit http://www.usbudgetwatch.org or check out our Facebook page.

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