The federal budget deficit for the current year will top $1.8-trillion according to the latest estimates produced by congressional economists
The Congressional Budget Office cited recent government bailouts, tax legislation and the continuing turmoil in financial markets as causes for the growth in the deficit . The latest figures, fueled by the $700 billion Wall Street bailout and diving tax revenues stemming from the worsening recession, would shatter the previous record for a federal shortfall of $459 billion, set just last year.
The 10-year outlook was no better, as the CBO projected a $9.3-trillion deficit over 2010-2019, which is $2.3 trillion more than the administration had initially forecast and exceeds gross domestic product by over 5 percent.
Proposed changes in tax policy are responsible for a 6.1 percent or $2.1 trillion loss in federal revenues over the next 10 years. The proposals with the greatest effect on the budget include modifications to and the permanent extension of provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 nd the Jobs and Growth Tax Relief Reconciliation Act of 2003 extension of the Making Work Pay tax credit, indexing of the exemption amounts for the AMT, implementation of a cap-and-trade program to reduce greenhouse-gas emissions and limits on itemized deductions.
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