Despite increased economic activity that will bring additional tax revenues to the government. Barack Obama’s budget to be released on Monday shows an increase in the budget deficit from last year.
President Obama’s 2013 budget due out Monday will estimate the deficit for 2012 to be $1.33 trillion, higher than the $1.29 trillion deficit in 2011, according to senior administration officials.
The increase happens largely because the budget assumes enactment of a $350 billion stimulus package, including extension of the payroll tax cut. That package is a scaled-down version of the $447 billion American Jobs Act that Obama proposed in the fall.The budget estimates that the deficit in 2013 will be $901 billion. This means that Obama will fail to cut the deficit in half after his first term, something he once vowed to do.
Last year’s budget had a rosy prediction that the deficit would decline to $768 billion in 2013, about half the $1.4 trillion deficit of his first year.
To get to the $901 billion target, Obama’s budget assumes that the Bush era tax rates for the wealthy will expire next year, something that is by no means certain.