–Congressional Budget Office Report Says Deficits Could Fall Sharply
–But CBO Report Says Deficit Fall Largely Due To Expiration of Tax Cuts
–CBO Report Shows Deficits Falling To $585B in FY’13, $345B In FY’14
–CBO Report Says Deficits For FY13-17 Could Total $1.7 Trillion
–CBO Report Says Deficits For FY13-22 Could Total $3.072 Trillion

By John Shaw

WASHINGTON (MNI) – The Congressional Budget Office said Tuesday
that it expects the fiscal year 2012 deficit to be $1.079 trillion, down
from $1.296 trillion in FY’11.

In its budget and economic outlook for fiscal years 2013 through
2022, the CBO sees deficits of $585 billion in FY’13, $345 billion in
FY’14, $269 billion in FY’15, and $302 billion in FY’16.

Looking further ahead, the CBO sees deficits of $220 billion in
FY’17, $196 billion in FY’18, $258 billion in FY’19, $280 billion in
FY’20, $279 billion in FY’21, and $339 billion in FY’22.

For the FY’13-17 period, the CBO sees cumulative deficits of $1.721
trillion. For the FY’13-22 period, the CBO sees cumulative deficits of
$3.072 trillion.

However, in its report, the CBO emphasized that under budget law it
must make its baseline estimates by assuming that current tax and
spending laws are unchanged.

The CBO said alternative scenarios that it has developed show much
higher budget deficits. These scenarios include extending the 2001 and
2003 tax cuts, making adjustments to the alternative minimum tax, and
projecting discretionary spending to rise at its historic rate.

In the CBO’s report, the agency sees the U.S. economy growing at 2%
in 2012 and only 1.1% in 2013. Again, these projections assume the
expiration of Bush era tax cuts and other contractionary fiscal
policies.

For the 2014 to 2017 period, CBO sees the U.S. economy expanding at
a rate of 4.1% and for the 2018 to 2022 period at 2.5%.

The CBO’s chief, Doug Elmendorf, will hold a briefing at 11 a.m. ET
on the new report.

He will testify to the House and Senate Budget Committees later
this week.

** Market News International Washington Bureau: (202) 371-2121 **

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