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Obama budget would cut deficit by $1.1 trillion over decade: CBO

Congressional Budget Office (CBO) Director Douglas Elmendorf speaks at a news conference to release the CBO's annual "Budget and Economic Ou
Congressional Budget Office (CBO) Director Douglas Elmendorf speaks at a news conference to release the CBO's annual "Budget and Economic Ou

WASHINGTON (Reuters) - Near-term U.S. deficits under President Barack Obama's 2014 budget plan would be higher than those forecast by the Congressional Budget Office this week but would be $1.1 trillion lower over the coming decade, CBO said on Friday.

The non-partisan congressional budget referee agency said that due to proposed spending increases, Obama's budget proposal would lead to a $669 billion deficit for fiscal 2013 and a $675 billion deficit for fiscal 2014 year starting October 1.

That was a combined $142 billion higher than the CBO estimates for those years based on current tax and spending laws.

Obama's budget plan has little chance of being passed by Congress, but defines his administration's bargaining position in the battle over raising the debt limit and reducing deficits in coming months.

Because Obama's budget increases revenues by $974 billion over the next decade, largely by raising taxes and limiting deductions for the wealthy, it would result in a $5.2 trillion cumulative deficit over the fiscal 2014-2023 period, CBO said, compared with its own $6.3 trillion current-law estimate on Tuesday.

But the $1.1 trillion reduction estimated by CBO is significantly less than the $1.8 trillion in deficit reduction that was claimed by the White House when its budget plan was first released in April.

(Reporting By David Lawder; Editing by Doina Chiacu)

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