The White House has released its mid-year budget projections, saying they confirm that President Obama’s fiscal plan would stabilize the deficit within a few years without short-changing important, growth-oriented investments.
The Mid-Session Review, which adjusts budget estimates for recent legislative and economic changes, estimates that this year’s deficit will drop to $455 billion — nearly $30 billion less than last year’s deficit and $128 billion lower than the administration had projected in February.
The review says the 2015 deficit will equal 2.6 percent of GDP. The administration projects that under its proposals, the deficit would fall to between 2.2 and 2.4 percent of GDP next year through 2018 and then rise before stabilizing at 2.7 percent from 2020 to 2025.
It’s important to remember, however, that based on current law the government remains on an unsustainable path, as confirmed last month by the Congressional Budget Office in its Long-Term Outlook.
With spending legislation for Fiscal 2016 stalled, serious bipartisan negotiations should begin soon to avoid a government shutdown this fall.
Spending caps enforced by the threat of sequestration (automatic cuts) are currently in place for annual spending approved by Congress. The Mid-Session Review reiterates Obama’s opposition to GOP efforts to boost defense spending while leaving domestic caps in place:
“The only path forward on the budget is a bipartisan, common-sense solution, one that reverses sequestration for defense and non-defense priorities . . .”
External links:
Mid-Session Review (OMB)
Mid-Session Review (OMB Director’s Blog)
Time for Bipartisan Talks on Spending, Debt Limit (Concord)
2015 Long-Term Outlook (CBO)
