AP

Biden administration forecasts $1.03T deficit, down $400B

Aug 23, 2022, 12:22 AM | Updated: 12:45 pm

FILE - Office of Management and Budget director Shalanda Young, second from left, speaks during a b...

FILE - Office of Management and Budget director Shalanda Young, second from left, speaks during a briefing at the White House in Washington, May 16, 2022. The Biden administration is forecasting that this year’s budget deficit will be nearly $400 billion lower than it estimated back in March. “The President’s top economic priority continues to be tackling the challenge of inflation, without giving up the historic economic gains we’ve made over the past 18 months,” said Young. (AP Photo/Susan Walsh, File)

(AP Photo/Susan Walsh, File)

WASHINGTON (AP) — The Biden administration is forecasting that this year’s budget deficit will be nearly $400 billion lower than it estimated back in March, due in part to stronger than expected revenues, reduced spending, and an economy that has recovered all of the jobs lost during the multi-year pandemic.

In full, this year’s deficit will decline by $1.7 trillion, representing the single largest decline in the federal deficit in American history, the Office of Management and Budget says.

Despite the gains, the administration said Tuesday that it is forecasting a deficit of $1.03 trillion for the budget year that ends Sept. 30. That number signifies a movement away from the record deficit in 2020, which reached $3.13 trillion.

The administration’s Mid-Session Review said much of the improvement in the deficit forecast for this year stemmed from the economy “transitioning from a historic and rapid recovery to stable and steady growth.”

The administration sees inflation pressures remaining into 2023, however.

“The President’s top economic priority continues to be tackling the challenge of inflation, without giving up the historic economic gains we’ve made over the past 18 months,” said Shalanda Young, director of the Office of Management and Budget in a statement.

“While costs are still too high for too many families, the President’s economic plan is working and we’re on the right track,” she said.

Because the projections of the Mid-Session Review were finalized in June, it does not include the $280 billion CHIPS and Science Act and estimated $740 billion climate, healthcare and tax measure.

And while the non-partisan Congressional Budget Office in July said, that fast economic growth and higher tax revenues have caused the federal debt this year to be lower than forecast, the organization warns in its 30-year outlook that debt will soon spiral upward to new highs that could ultimately imperil the U.S. economy.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Image: A cargo ship is stuck under the part of the structure of the Francis Scott Key Bridge after ...

Associated Press

Authorities identify 2 bodies recovered at site of Baltimore bridge collapse

A major bridge in Baltimore snapped and collapsed after a container ship rammed into it early Tuesday, and several vehicles fell into the river below.

16 hours ago

Photo: Mountaineer Jim Whittaker has died at 95....

Gene Johnson, The Associated Press

Lou Whittaker, among the most famous American mountaineers, has died at age 95

Lou Whittaker, a legendary American mountaineer who helped lead ascents of Mount Everest, K2 and Denali, has died at age 95.

16 hours ago

File photo: Former Sen. Joe Lieberman speaks in Washington on Jan. 18, 2024....

Associated Press

Former Sen. Joe Lieberman, Democrats’ VP pick in 2000, dead at 82

Former U.S. Sen. Joe Lieberman of Connecticut, who nearly won the vice presidency on the Democratic ticket with Al Gore in 2000, has died.

16 hours ago

islamic state attack...

Vanessa Gera, The Associated Press

What we know after the Islamic State group claims responsibility for Moscow massacre

The Islamic State group has claimed responsibility for an attack on a suburban Moscow concert hall that killed at least 133 people.

4 days ago

Moscow shooting...

The Associated Press

Russia: 60 dead, 145 injured in concert hall raid; Islamic State group claims responsibility

Assailants burst into a concert hall in Moscow on Friday and sprayed the crowd with gunfire, killing over 60 people, injuring more than 100.

6 days ago

Photo: Britain's Kate, Duchess of Cambridge visits 282 (East Ham) Squadron, RAF Air Cadets, Cornwel...

Associated Press

Kate Middleton announces she has cancer, is undergoing chemotherapy

Kate Middleton, Princess of Wales, says she is undergoing chemotherapy to treat cancer. She has been out of view since Christmas.

6 days ago

Biden administration forecasts $1.03T deficit, down $400B