WASHINGTON - The federal budget deficit will fall to $759 billion for the fiscal year that ends this September, a $214 billion improvement from the projection made in March, as spending cuts, tax increases and an improving economy begin to tame the government's red ink, the White House budget office said on Monday.
The annual midsession review from the White House Office of Management and Budget was largely in line with a recent forecast from the Congressional Budget Office. Both see a rapid decline in deficits expressed as a percentage of the economy, the fastest since the years following World War II, according to Sylvia Mathews Burwell, the White House budget director. The White House said this year's deficit would reach 4.7 percent of the gross domestic product, down from more than 10 percent four years ago, and would continue to slide to 3 percent of the economy by 2017.
But absent structural changes to Medicare and Social Security, the forecast makes clear that such short-run improvements may not last. The White House projected the deficit to bottom out at $496 billion in 2018, then start ticking back up to $593 billion in 2022.
Over the course of the next decade, the White House said nearly $6.6 trillion will be added to the federal debt, with President Obama's policies in place. That is slightly higher than the $6.3 trillion that the Congressional Budget Office said current policies without additional changes would add to the debt through 2023. The office's forecast assumes the automatic spending cuts known as sequestration will remain in force, while the president's figures assume they will not.
Senator Jeff Sessions of Alabama, the ranking Republican on the Senate Budget Committee, said total spending under the president's budget would rise $1.5 trillion - about where it would be without policy changes.
“Ominously, the president provides no serious proposal for strengthening and preserving our unsustainable Medicare and Social Security programs,†Mr. Sessions said.
Still, both the White House and the Congressional Budget Office deficit figures mark a steady improvement in the federal government's fiscal picture as Washington approaches its next budget showdown.
On Sept. 30, the spending laws now financing the government will expire, and the House and Senate are far apart in the amount of money the chambers want to allocate for the next fiscal year. In October or November, the government will exhaust its ability to borrow, and Republican leaders in Congress have said they will not raise the government's debt limit without more concessions, either on spending, entitlement programs like Medicare, or an overhaul of the tax code.
For his part, Mr. Obama is sticking to jobs proposals that include spending increases on roads, bridges and other infrastructure that are included in his spending forecast.
“The president believes our top priority must be strengthening the true engine of economic growth â€" a rising and thriving middle class,†Ms. Burwell said. “The 2014 budget demonstrates that we do not need to choose between making critical investments necessary to help grow our economy and support middle class families and continuing to cut the deficit in a balanced way.â€
Republicans in Congress, who are pressing for a budget that actually balances in 10 years, did not greet the new figures with relief.
“The president's plan is simply to tax more in order to spend more: avoiding any attempt at reducing the waste and inefficiency that plagues the federal budget,†Mr. Sessions said.
