The Nation : Deficit as High as $141 Billion Projected

The Congressional Budget Office disclosed that it expects the federal deficit for next year to be $141 billion if Congress does not approve any changes in current spending or tax policies. By comparison, the White House’s Office of Management and Budget forecasts its “baseline” deficit at $127 billion for the fiscal year beginning Oct. 1. The difference between the two forecasts is mostly due to varying assumptions about how the economy will perform over the next year. The Gramm-Rudman budget law calls for lawmakers to cut the deficit to less than $110 billion next year, so the CBO report implies that Congress must find roughly $30 billion in spending cuts or tax increases, while the OMB projection suggests that only about $17 billion in deficit reductions are required. Both agencies are required to present more up-to-date estimates in August, closer to the Gramm-Rudman deadline in October, but only the OMB projections are used in the final determination of whether Congress has met the requirements of the budget law.