Current Fiscal Deficit To Reach About $1.6 Trillion

The deficit for the current fiscal year is expected to reach $1.6 trillion, including about $100 billion in additional tax cuts and public works spending in which President Obama has encouraged job creation.

However, the new budget for 2011 is expected to lower annual deficits over the next decade. The President’s plan to move from stimulus spending to deficit reduction in the budget for the coming fiscal is based on the assumption that the economy will have recovered fully from recession.

The $1.6 trillion deficit this year is about 11 percent of the GDP and $150 billion higher than previous year’s shortfall.