By including a 10-year outlook and the full costs of anticipated spending, such as in military operations in Iraq and Afghanistan, the budget outlook released this morning by the Obama administration features a measure of transparency that was lacking in those of the previous administration. The budget shows the president inherited a difficult fiscal situation, with the deficit for the current fiscal year expected to be $1.3 trillion or 9.2% of gross domestic product (GDP) even before adding on the recently-passed recovery package. Despite the poor economic conditions, the president’s blueprint maps a path toward a sustainable deficit while setting aside money to meet core economic challenges. The budget proposal shows a halving of the deficit by 2013, at which point it will reach a sustainable 3% of gross domestic product. This is a deficit reduction relative to current levels, but also relative to projected deficits under Bush’s policies. — John Irons and Ethan Pollack
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