Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

6 of 7
BACKNEXT
Budget deficit: Spending, big-time
The federal budget deficit has continued to swell since Obama took office and the president's ambitious agenda could push the national debt even higher in the short term.

The deficit grew by $776.51 billion from January to June, and has already topped $1 trillion since the government's fiscal year started in October. The administration has said it expects the fiscal 2009 deficit to reach $1.75 trillion. That would be 12.3% of U.S. gross domestic product -- the highest since World War II.

The administration maintains that its budget plan will ultimately reduce the deficit over 10 years. "When you have a cataclysmic economic crisis, worries about the deficit have to be set aside," said the Economic Outlook Group's Baumhol.

Still, critics say Obama's plans for reforming health care, improving education and fighting climate change are overly ambitious. "A deficit so large is going to constrain a lot of initiatives and will require higher taxes in the future," said Korok Ray, a former senior economist in the Bush administration and an assistant professor at Georgetown University.



NEXT: Automakers: Bankruptcy and 'Clunkers'

Last updated August 05 2009: 9:07 AM ET
Email | Print | Share  |  RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
More Galleries
10 of the best beaches near airports Wait out your layover in the transit lounge? Or grab some sun, sand and surf? More
World's Top Employers for New Grads For an exclusive CNNMoney list, research firm Universum Global surveyed business students at colleges around the world to see where they most want to work. More
A White House press briefing as told by CNN's sketch artist The White House started banning cameras during some briefings, so CNN sent in sketch artist Bill Hennessy. More

Special Offer