The Congressional Budget Office released its updated "Budget and Economic Outlook" last month. This document projects federal government revenues and outlays over the next ten years.
Obviously, this latest version presents a more dire budgetary outlook than the previous version, which did not include the effects of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.
This bill, passed in December, reduced payroll taxes, extended unemployment benefits and tax incentives for businesses, instituted a lower-than-expected estate tax, and extended the Bush tax cuts (previously scheduled to expire in 2011). The net result, in the short term, is that the budget deficit for 2011 is now expected to approach $1.5 trillion, or 9.8% of Gross Domestic Product (GDP). The previous estimate had been less than $1.1 trillion, or 7.0% of GDP. For the entire 10-year forecast period, the cumulative deficit is now expected to be $1.44 trillion higher than under the prior CBO estimates.
Nice work, esteemed Congress people.