By Erik Wasson - 07/08/13 07:10 PM EDT
The White House on Monday estimated that the budget deficit for 2013 will be $759 billion — a difference of $214 billion from the $973 billion deficit projected in President Obama's budget.
If the projection proves correct, it would be the first time since Obama took office that the deficit fell below $1 trillion for the fiscal year.
The White House budget office's annual mid-session review says that as a percentage of gross domestic product (GDP), the deficit would be 4.7 percent compared to 6 percent projected in the budget.
Some of the changes to the 2103 deficit projection stem from $65 billion in higher revenue. The budget office sees $101 billion more in individual tax revenue due to technical adjustments, but this is lowered by $46 billion due to slower economic growth this year in part due to budget sequestration.
The mid-session review sees spending reduced by $149 billion in 2013 compared to the April estimate. In March, automatic budget cuts known as sequestration went into effect, lowering outlays this year by $43 billion, the White House notes. Further spending has been reduced because the government-backed mortgage giants Fannie Mae and Freddie Mac paid dividends to the Treasury.
The mid-session review makes the case for Congress to adopt Obama's 2014 budget, even though lawmakers from both sides of the aisle declared it dead on arrival.
The budget office said the new revised estimates continue to make the case that the budget "achieves the core goal of fiscal sustainability by putting Federal debt on a declining path as a share of the economy."
It estimates that by 2023, the deficit will reach only 2.1 percent of GDP, within the range that can be considered on pace with economic growth.
In contrast, the House has passed a budget cutting $4.6 trillion in spending in order to balance by 2023. The Senate passed a plan with more taxes and fewer entitlement cuts than Obama has proposed.
"The 2014 Budget demonstrates that we do not need to choose between making critical investments necessary to help grow our economy and support middle class families and continuing to cut the deficit in a balanced way," new Obama budget director Sylvia Mathews Burwell wrote in announcing the report.
Senate Budget Committee Ranking Member Jeff Sessions (R-Ala.), in contrast, said the new report confirms Obama is unwilling to rein in rising entitlement costs and instead wants to tax more in order to spend more.
“Today’s updated budget report from the White House confirms that the president’s budget plan leaves us on an unsustainable fiscal path," Sessions said. "Spending increases 63 percent from today’s levels—three times the inflation rate. …. Ominously, the president provides no serious proposal for strengthening and preserving our unsustainable Medicare and Social Security programs."
The new report contains revised economic projections for the next 10 years. The White House now sees unemployment falling more quickly, averaging 7.5 percent in this fiscal year, down from 7.7 percent in the budget.
— This story was updated at 5:09 p.m.