· The latest estimates of the federal government's budget deficit were released yesterday by the Congressional Budget Office. Though this fiscal year's deficit estimate of $1.3 trillion was down slightly from 2009 due to the end of the latest recession, it remained near a record. As a percentage of GDP, the 9.2% deficit was near its peak and triple the 2008 figure.

· With the end of the recession revenues are expected to rise 3.3% after the huge decline last year. Thereafter, as the economic recovery matures revenue growth is expected in the double-digits for both 2011 and 2012. Subpar growth in employment is expected, however, to hold revenue growth below recoveries. A subpar recovery in corporate profits also would contribute to low federal revenue growth.

· This year the projected deficit would lift the national debt to $13.3 trillion. At 91% of GDP that is the highest level since 1950.

· The CBO's latest budget projections are available in Haver's USECON database.

· Budget Outlook 2010 from the Congressional Budget Office can be found here.

Ongressional Budget Office Projections

2012

Federal Budget Deficit ($ Billion)

650