Spending in July rose to $332.2 billion, up 26 percent from a year earlier, whereas revenue fell 6 percent to $151.5 billion. The deficit now stands at $1.27 trillion so far this year.

 

For the entire fiscal year, budget experts are predicting a deficit of around $1.6 trillion by the year's end. Although this is somewhat less than previous Administration and Congressional Budget Office FY 2009 deficit forecasts (mainly because the Obama administration never requested an anticipated $250 billion for additional financial bailouts), it will still be far higher than deficits at any other time in history.

 

Although immediate deficit reduction could destabilize the economic recovery, CRFB  has urged the Administration and Congress to act swiftly to develop and pass a medium- and long-term fiscal consolidation plan to bring down deficits once the economy has recovered.