The Obama administration yesterday acknowledged that the US recession had been deeper and more damaging to the country's fiscal position than it had thought, and projected the budget deficit would be $2,000bn higher over the next 10 years than forecast.
The impact of the White House's numbers were partly blunted by its announced reappointment of Ben Bernanke as Fed chairman, which was greeted warmly by the stock markets. But taken together with a separate forecast yesterday by the independent Congressional Budget Office, the announcements presented a bleak picture of America's deteriorating debt position.
The CBO released sharply higher deficit projections predicting the 10-year deficit would reach $7,140bn, some $2,700bn more than it had thought in March. Unlike the White House's calculations, the CBO estimate assumes all policies will stay exactly as they are.