For all y'all who spout about GOP tax cuts...

[sup-rbeast]

Here's something for ya...deficit more than doubles in a year...

<span style='font-size: 26pt'>Uncle Sam: $407 billion in the hole</span>
<span style='font-size: 17pt'><span style="color: #CC0000">Deficit up by $246 billion in a year.</span></span> Federal agency cites 'substantial increase in spending' and 'halt' in tax revenue growth. Also says it will add Fannie and Freddie to future estimates.<span style="color: #CC0000">

By Jeanne Sahadi, CNNMoney.com senior writer
Last Updated: September 9, 2008: 1:11 PM EDT

NEW YORK (CNNMoney.com) -- The budget deficit will jump by $246 billion to $407 billion this year, the Congressional Budget Office estimates in a report released Tuesday.

"Over the long run, growing budget deficits and the resulting increases in federal debt would lead to slower economic growth," the agency said.

Last year, the budget deficit was $161 billion. The government's fiscal year ends Sept. 30. The agency attributes the jump to "a substantial increase in spending and a halt in the growth of tax revenues."

That drop in revenue is driven in part by an estimated 15% decline in corporate tax receipts. They fell as a result of lower corporate profits and tax rules governing how businesses depreciate their investments this year. A second factor is the rebates provided to tax filers from the economic stimulus law Congress passed earlier this year.

The spending hike is partly due to efforts by the government "to cover the insured deposits of insolvent financial institutions," the agency said.

To date, 11 banks have been seized by the FDIC this year - not a high number historically, but higher than it's been in recent years - and that number is expected to grow in the coming months.

The CBO said it expected the deficit to exceed $400 billion - or 3% of gross domestic product - for each of the next two years if current policies remain in place. It also forecast several more months of "very slow" economic growth.

"The nation is experiencing a significant period of economic weakness," said Peter Orszag, director of the CBO, in a press briefing.

The CBO's estimate for the cumulative deficit over the next 10 years is now $2.3 trillion. Earlier this year, the CBO estimated the country would have a $300 billion surplus by 2018. But that was wiped out in part because of new spending approved by lawmakers for the war in Iraq and Afghanistan and revised economic projections.

And the 2.3 trillion figure doesn't account for the likelihood that the 2001 and 2003 tax cuts will be extended or that the middle class will continue to be protected from the Alternative Minimum Tax - or so-called wealth tax. If those extensions are made - and both presidential nominees have been calling for that, at least in part - then the 10-year deficit projection jumps to more than $7 trillion.
Putting Fannie and Freddie on the books

The agency's latest estimates do not reflect the Treasury announcement this weekend that the government would temporarily takeover Fannie Mae and Freddie Mac, the two government-sponsored enterprises that form the backbone of the mortgage market.

But Orszag said that come January, the CBO will be incorporating the activities of Fannie and Freddie in its baseline for the federal budget. The CBO will be working with House and Senate budget committees to address questions of just how transactions by both companies should be accounted for - the answers to which will greatly influence the net effect the companies have on the federal deficit.

"The degree of control exercised by the federal government is so strong that the best treatment is to incorporate [the agencies] into the federal budget," Orszag said.

To allay one concern that many taxpayers have expressed, the roughly $5 trillion in loans that Fannie and Freddie own or back would not be added wholesale to the debt held by the public, Orszag told CNNMoney.com.

"I don't see a scenario in which you take a total of the mortgages backed and add that to the federal deficit," he said.

But beyond all these near-term concerns affecting the government's debt load, he said the biggest challenge facing the country's coffers is rising health care costs. Federal spending on Medicare and Medicaid alone is expected to jump 30% in the next decade - from 4.6% of GDP this year to 6% in 2018. By 2050, it could jump to 12% of GDP.

As a result, Orszag said in the press briefing, "The nation is on an unsustainable fiscal course." To top of page
First Published: September 9, 2008: 9:45 AM EDT

[color:#FFCC33]<span style='font-size: 14pt'>Yep...we need 4 more years of this policy..maybe by then we can get it up to 16 billion..</span></span>

[imported_Counts]

I agree!!!! Anyone who is involved in passing this budget should be voted out of office

(Remind me again which branch of goverment controls the purse strings?)

[BlueWahooChambordDevil]

great idea.......lets raise taxes for everybody

just what i want

to pay more of my hard earned money to the govt than i already do

stellar idea

there are other ways to make up the difference........we just havent seen any of them lately

[TheBeast]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Counts</div><div class="ubbcode-body">I agree!!!! Anyone who is involved in passing this budget should be voted out of office

(Remind me again which branch of goverment controls the purse strings?) </div></div>

Would that be the Democratic Congress Alex?

[BlueWahooChambordDevil]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: TheBeast</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Counts</div><div class="ubbcode-body">I agree!!!! Anyone who is involved in passing this budget should be voted out of office

(Remind me again which branch of goverment controls the purse strings?) </div></div>

Would that be the Democratic Congress Alex? </div></div>
that it would be

[CoeburnCane]

If we are $407 billion in the hole, and fees & taxes are the only real income for the government (basic civics right there), what is the proposition to get the country out of debt other than raising taxes somewhere in some bracket? Any bright ideas?

We can all complain about taxes going up all we want, but if this country keeps going in debt like this, it weakens us in the global economy and makes our American dollars worth much less. Keep taxes where they are, save a few dollars here & there, and then watch the value of the dollar decline--see what you can buy when we owe twice this.

[CoeburnCane]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: TheBeast</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Counts</div><div class="ubbcode-body">I agree!!!! Anyone who is involved in passing this budget should be voted out of office

(Remind me again which branch of goverment controls the purse strings?) </div></div>

Would that be the Democratic Congress Alex?</div></div>

Last I checked there were 6 years of Republican Congress writing the budget before that...Alex. Also--last I checked, the president has the right to use veto power on some items in the budget before approving or rejecting that budget proposed by Congress--no matter which party is in control when it's written.

Basic Fred Crabtree Civics again (BWC, you won't get that reference--don't ask, only the locals will).

[sup-rbeast]

That 6 years of total GOP control has produced this deficit. The interest on the Iraq War alone up to 2006 is more than we can pay off. Ol W won't veto anything that lets him waste money...and he won't sign anything that won't..

With the shape the country is to be left in, George could sing for ACDC, at least about the road trips.

[cuuvapitt]

Yeah double those taxes and see how stimulating to the economy that will result in...so now that I have worked an extra job to start to get out of debt myself for over a year now that won't be enough to stay going in the right direction when I have to pay twice as much like I did with Clinton in office...As a middle class person, I was much worse off financially before said tax cuts than since they were enacted!!!