SHRINKING THE DEFICIT
August 3, 2004
The federal budget deficit for fiscal year 2004 will be about $445 billion, including increased projections for Medicare and Social Security spending, says a new report from the Office of Management and Budget (OMB).
According to the report:
- The projected budget deficit is still the highest ever, but is less than previous White House estimates of $521 billion.
- The deficit for 2004 is now estimated at 3.8 percent of GDP, a decline of 0.7 percent as a share of GDP.
- Health and Human Services (HHS) actuaries changed the projections for 5-year outlays in Medicare ($67 billion more) and Social Security ($59 billion more).
Some of the decrease in the deficit can be attributed to stronger than expected economic growth.
The OMB report also said that the federal deficit will fall to 1.5 percent of the nation's economic output in 2009, well below the 2.2 percent average deficit of the last 40 years, and two-thirds smaller than the peak projected 2004 deficit of 4.5 percent of GDP.
Source: Statement by Joshua M. Bolton (Director, Office of Management and Budget), Friday, July 30, 2004; "Mid-Session Review, Fiscal Year 2005," Office of Management and Budget, July 30, 2004.
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