This is no huge surprise. CBO still says it will be $9.3 trillion. And all these numbers are without health care, and include very rosy assumptions for economic growth. We believe the numbers will be a few trillion higher than CBO assumes. Will be fun to watch how much the bond market responds this week with heavy supply in the offing.
From Reuters:
- The Obama administration will raise its 10-year budget deficit projection to approximately $9 trillion from $7.108 trillion in a report next week
- The higher deficit figure, based on updated economic data, brings the White House budget office into line with outside estimates and gives further fuel to President Barack Obama's opponents, who say his spending plans are too expensive in light of budget shortfalls.
- Record-breaking deficits have raised concerns about America's ability to finance its debt and whether the United States can maintain its top-tier AAA credit rating.
- Treasury markets have been worried all year about the mounting deficit. The United States relies on large foreign buyers such as China and Japan to cheaply finance its debt, and they may demand higher interest rates if they begin to doubt that the government can control its deficits.
Read the whole thing at Reuters.
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