Playing shenanigans with deficit forecasts

The Obama administration has been basing its budget plans on quite rosy scenarios. It came out earlier this year with projections of economic growth of 3.25 for next year and with lower unemployment than we are seeing now.

Obama’s current forecasts envision 3.2 percent growth next year, 4 percent growth in 2011, 4.6 percent growth in 2012 and 4.2 percent growth in 2013.

The administration was supposed to come out with an updated budget forecast in mid-July. These numbers are crucial because they will be the basis of new deficit forecasts. As Politico explained last week, a change in projections of economic growth will give us more frightening projections on the federal deficit.

The White House projected revenues for 2012 are forecast at $3.1 trillion. But if growth is just 2 percent, rather than around 4 percent, as some economists now expect, that income would hover around $2.4 trillion — adding another $700 billion to the projected deficit of $581 billion.

Such numbers are not conducive to passing a mammoth, expensive health care reform package.

Well, the Obama administration has now pushed back their publication of their new forecasts from mid-July until August when, coincidentally Congress will be on vacation.

The administration's annual midsummer budget update is sure to show higher deficits and unemployment and slower growth than projected in President Barack Obama's budget in February and update in May, and that could complicate his efforts to get his signature health care and global-warming proposals through Congress.

The release of the update — usually scheduled for mid-July — has been put off until the middle of next month, giving rise to speculation the White House is delaying the bad news at least until Congress leaves town on its August 7 summer recess.

How convenient. They hope to get away with postponing the release of what is sure to be a depressing new forecast on economic growth and budget deficits after they rush through health reform in Congress. They know that such numbers are making some more moderate Democrats feeling very skittish about voting for health reform. Putting off their revised forecasts isn't going to change the facts, of course, but it may delay some ugly headlines breaking out right in the middle of their debate.