WASHINGTON, March 14, 2012-The nonpartisan Congressional Budget Office released its baseline update on Tuesday and projected that the federal deficit for 2012 will be $1.2 trillion. That’s $93 billion larger than last estimated in January, primarily due to the extension of the payroll tax holiday which had been set to expire Feb. 29.
However, the projected deficit for 2013-2022 is now $186 billion smaller than CBO had thought in January, primarily due to some updated technical assumptions.
“The fundamental story about the federal budget has not changed: Although the deficit is starting to shrink, it remains very large by historical standards,” CBO noted in its report.
The CBO’s baseline projection serves as a benchmark to score mandatory spending in the 2012 Farm Bill.
Tuesday’s report indicates that there are about $82 billion more in outlays, compared to the March 2011 baseline. About $70 billion of that amount is due to increased Supplemental Nutrition Assistance Program (SNAP) outlays and another $10 billion from spending on crop insurance. Sources familiar with the budget say that, looking at numbers from any one year, especially on crop insurance, may be problematic because “timing gimmicks” were used to generate “savings” for different years. For example, crop insurance premium payments that normally would have occurred in fiscal 2012 were pushed back to fiscal 2013. As a result, crop insurance outlays are smaller in 2012 and larger in 2013 than they might have otherwise been. In addition, the crop insurance and disaster assistance budget lines for fiscal 2013 include $1.3 billion in Supplemental Revenue Assistance program (SURE) payments.
Original story printed in March 14, 2012 Agri-Pulse Newsletter.
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