U.S. Budget Deficit At Record $1.42 Trillion, But Lower Than Estimates
Final 2009 fiscal year budget results were released Friday by White House Office of Management Director Peter Orszag and U.S. Treasury Secretary Tim Geithner showing the largest budget deficit in the nation's history.
Both Orszag and Geithner cited the debilitating economic and financial crisis during the past year as the catalyst for the deficit, while also integrating that the final $1,417 billion deficit came in $162 billion lower than projected.
"This year's deficit is lower than we had projected earlier this year, in part because we are managing to repair the financial system at a lower cost to taxpayers. But future deficits are too high, and the President is committed to working with Congress to bring them down to a sustainable level as the economy recovers," Secretary Geithner explained.
In a statement from Orszag and Geithner, blame for the 2009 deficit was placed on the previous administration's spending and tax policies, as well as the economic recession and financial crisis that was currently crippling the nation's economy as the current administration came into office.
"It was critical that we acted to bring the economy back from the brink earlier this year. As we move from rescue to recovery, the President recognizes that we need to put the nation back on a fiscally sustainable path. As part of the FY 2011 budget policy process, we are considering proposals to put our country back on firm fiscal footing," Director Orszag stated.
Outlays totaled $3,522 billion for FY2009, while receipts totaled $2,105 billion. Outlays came in $132 billion below estimates which can be attributed largely to the lower-than-anticipated outlays for the Troubled Assets Relief Program (TARP).
While the current administration moves forward in efforts to bring the nation's economy back to stability the Congressional Budget Office (CBO) anticipates a slow and tedious recovery due to several factors including a weak global economy and continuing stress on the financial markets.
The CBO estimates that if the current policies stay in place that the deficit will drop to 9.6 percent in FY2010 and 6.1 in 2011. Revenues are estimated to grow by $164 billion in FY2010 according to the CBO while outlays are projected to drop by $44 billion.
Orszag and Geithner reiterated that the deficit did come in lower than projected, however the CBO is still cautious, projecting a slow economic turn-around in upcoming years as the current administration attempts to continue the healing process.
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