"The deficit has been cut by more than half as a share of the
economy, representing the most rapid sustained deficit reduction
since World War Two, and it continues to fall," acting White House
budget director Brian Deese said in a statement.
Despite the narrower deficit, Republicans and analysts raised
concerns about high levels of debt over the long term. The White
House projection shows that, even thought debt is on a declining
path, it would reach 72 percent of GDP in 2024 instead of 69 percent
as originally estimated, the Committee for a Responsible Federal
The Obama administration projected a $649 billion deficit for the
fiscal year ending on Sept. 30 when it delivered its budget proposal
to Congress in March. The deficit peaked at $1.4 trillion in 2009 in
the aftermath of the recession that ended that year. The White House
said it revised its forecast in the so-called mid-session review
because the national unemployment rate has come down more rapidly
than expected. The jobless rate fell to 6.1 percent in June from 6.7
percent in March, a six-year low. The administration said it now
expects the deficit to be 3.4 percent of gross domestic product for
the year, down from 3.7 percent, and to fall to below 3 percent of
GDP in 2015.
President Barack Obama in recent speeches has pointed to an
improving economic climate, citing gains in hiring, housing and
manufacturing. But wages have lagged and polls show many Americans
remain downbeat about their prospects five years into the recovery
from the recession.
"It is clear that much more needs to be done to accelerate economic
growth," the White House said on Friday.
[to top of second column]
Since budget fights that led to the 16-day government shutdown in
October 2013, some of the battle lines between congressional
Republicans and the White House have softened.
However, Obama and Republican lawmakers are still at odds over
spending levels. Lawmakers balked at the president's request this
week for $3.7 billion in emergency funds to bolster border security,
saying it is too high.
House of Representatives Appropriations Committee Chairman Harold
Rogers said the request might have to be included in normal spending
bills for the 2015 fiscal year that starts Oct. 1. If so, the costs
would be subject to an overall spending cap of just over $1
trillion, meaning there would have to be cuts elsewhere.
Reacting to the mid-session review numbers, the top Republican on
the Senate Budget Committee, Jeff Sessions, said the deficit
reduction could be greater if the president's spending request were
held in check.
"The modest reduction in deficits and debt claimed in the budget are
accompanied by significant increases in federal spending," Sessions
(Reporting by Mark Felsenthal; Editing by Doina Chiacu, Will Dunham
and James Dalgleish)
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