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White House projects deficit to fall to $455B for 2015

White House projects deficit to fall to $455B for 2015
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The federal deficit is estimated to tick down to $455 billion by the end of the fiscal year in September, according to the Office of Management and Budget’s mid-session review released Tuesday.

As a share of the economy, the shortfall would equal 2.6 percent of gross domestic product (GDP).

“Under the President’s leadership, the deficit has been cut by more than two-thirds as a share of the economy, representing the most rapid sustained deficit reduction since World War II, and it continues to fall,” OMB Director Shaun DonovanShaun L. S. DonovanYang: 'Defund the police is the wrong approach for New York City' New York mayoral candidates go viral for vastly underestimating housing costs Five things to watch in the New York City mayoral race MORE wrote in a blog post.

The new projected deficit would be nearly $30 billion less than the government’s red ink in 2014 and $128 billion less than administration’s 2015 deficit prediction back in February.

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OMB’s mid-session review updates the administration’s estimates for spending, revenue and the deficit over a 10-year period.

Under Obama’s proposed 2016 budget, the review projects that his proposed policies would cause deficits to fall between 2.2 and 2.4 percent over the next three years.

The deficit is projected to fall even further to $429 billion by the end of fiscal 2016, OMB said, but go back up for the rest of the budget window. By 2025, the deficit is projected to be $742 billion.

Over the next decade, the administration predicts a more rapid decline in the unemployment rate. It would drop from 5.3 percent to 4.9 percent in 2016 and to 4.6 percent in 2017 and 2018.

The administration expects to collect $72 billion more in revenue this year compared to the February estimate. Revisions in the economic forecast, however, are projected to reduce revenue in 2015 by $22 billion, OMB said. 

OMB estimates government spending will total $3.7 trillion by the end of September, which is $56 billion lower than its original projection. This number reflects slower than expected spending in discretionary and mandatory programs.