OMB has just released its Mid-Session Review, incorporating the effects of the Budget Control Act and the Super Committee's target savings into its projections. The MSR shows significant improvement compared to the President's Budget, although deficits obviously are higher than under CBO's current law estimates. The MSR focuses more on where debt levels could be if the Super Committee succeeds and the upper-income tax cuts expire than on making new budget proposals--OMB estimates over 70 percent by 2021.
Deficits from 2012-2021 have dipped to $5.8 trillion compared to the $7.2 trillion that was projected in the President's Budget. The Budget Control Act accounts for a large portion of the decline in deficits, with significantly worse near-term economic projections offsetting some of the savings.
In the graph below, we compare debt under the MSR, the President's Budget, and the most recent CRFB Realistic Baseline.
Stay tuned to CRFB and The Bottom Line for more commentary on the Mid-Session Review.