With all the attention on the fiscal cliff looming only weeks away, the fact that the federal government will hit the debt ceiling in the next few months appears to be on the back burner. At the same time, it's hovering over current negotiations, which is why some lawmakers, including Senate Majority Leader Harry Reid (D-NV), would like to see the issue resolved at the same time as a cliff deal.

CBO has released two new reports that detail our short run problem of the fiscal cliff and the long term challenge of reducing the debt. Reading the reports together gives a good idea of the challenges lawmakers face as they work to replace the fiscal cliff with a "grand bargain."

The CBO has released its newest estimate of the Troubled Asset Relief Program (TARP), showing that it would cost taxpayers a total of $24 billion. This is $8 billion lower than their last estimate done in March.

CBO's final Monthly Budget Review for FY 2012 came out today, showing the (preliminary) final estimate for the deficit that year: $1.09 trillion, or 7.0 percent of GDP. This figure is about $40 billion less than the $1.13 trillion deficit (7.3 percent of GDP) that CBO projected for 2012 in August and about $210 billion less than the $1.3 trillion (8.7 percent of GDP) deficit in 2011.

We've warned many times before that going off the fiscal cliff would throw the economy into a double dip recession.

Naturally, when a new budget projection is released, as CBO's updated baseline was yesterday, a good question to ask is: what happened? It is interesting to see how the budget projections change as time unfolds and CBO incorporates new data. As is often the case, the answer boils down to mostly economic and technical revisions to health care, interest spending, and revenue.

With the release of CBO's updated budget and economic outlook, we at CRFB have the opportunity to update our Realistic baseline.

CRFB has just released a new analysis of CBO's updated Budget and Economic Outlook. The CBO updates its baseline every year in January, March, and August to account for changes in its forcasting of the Current Law and Alternate Fiscal Scenario (AFS) baselines. Below is the current law projection for each baseline that CBO has produced this year.

The Congressional Budget Office has just updated its Economic and Budget Outlook. We will be releasing a paper on changes to CBO's projections from March, as well as updating CRFB's Realistic Baseline to account for any adjustments. In the meantime, CBO has provided a fantastic infographic on the fiscal cliff:

CBO's Monthly Budget Review for July lays out how the first ten months of this fiscal year compared to last year. The FY 2012 deficit so far totals $975 billion, $125 billion lower than the $1.1 trillion at this point last year. The lower deficit is the result of revenue being $114 billion higher and spending actually being $11 billion lower.