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SACRAMENTO — With high unemployment continuing to eat at California's tax revenues, and risky budget gimmicks failing to materialize, the state's deficit next year could hit a staggering $25 billion. If worst-case scenarios hold true, several insiders who track the state's financial picture tell the Mercury News, the deficit through June 2011 would be billions higher than previous estimates. Gov. Arnold Schwarzenegger's best-case estimate earlier this week was half that sum, at $12.4 billion. Assembly Republican leader Sam Blakeslee of San Luis Obispo floated a number as high as $20 billion during water negotiations. "It's not outrageous," one budget expert...

Federal income tax rates would have to be nearly tripled across the income spectrum if Congress were to close the deficit in fiscal year 2010, according to a new report from the nonpartisan Tax Foundation. Instead of taxing joint filers with rates ranging from 10 percent to 35 percent, tax rates would have to start at 27.2 percent and reach up to 95.2 percent. "Federal government spending levels are so high that even if policymakers were willing to stop debt-financing government services, the federal tax system in its current form wouldn't be able to raise that much," said Tax Foundation...

WASHINGTON (Reuters) – The U.S. government spent a record $1.4 trillion more than it collected in the fiscal year ended September 30, congressional analysts said on Wednesday, in their final estimate before the official numbers are issued. Bank bailouts, stimulus spending and declining tax revenues due to a deep recession led the government to post a deficit that amounts to 9.9 percent of the U.S. Gross Domestic Product for the 2009 fiscal year, the Congressional Budget Office said. The Treasury Department will report the actual deficit later this month. The deficit for fiscal 2008 was $459 billion. The $1.4 trillion...

The federal budget deficit tripled to a record $1.4 trillion for the 2009 fiscal year that ended last week, congressional analysts said Wednesday. The Congressional Budget Office estimate, while expected, is bad news for the White House and its allies in Congress as they press ahead with health care overhaul legislation that could cost $900 billion over the next decade. The unprecedented flood of red ink flows from several factors, including a big drop in tax revenues due to the recession, $245 billion in emergency spending on the Wall Street bailout and the takeover of mortgage giants Fannie Mae and...

$2,000,000,000,000. That's the amount by which the Obama administration raised its ten-year estimate of the nation's budget deficit from the one it made only a few months ago. Now, $2 trillion is a lot of money. But even more significant is the fact that this revision represents almost a 30 percent increase -- no tiny percentage of the earlier $7 trillion figure. It seems that expenses are higher -- up 24 percent this year, the largest increase since the height of the Korean War -- than originally estimated, and revenues are lower. The resulting deficit, says Peter Orszag, Obama's budget...

Gov. Arnold Schwarzenegger is hoping that the "Great California Garage Sale" will turn government clutter like surplus prison uniforms and office furniture into cash to bulk up the state's depleted finances. On offer as the state clears out clutter are nearly 600 state-owned vehicles and thousands of pieces of office furniture, computers, electronics, jewelry, pianos, even a surf board, a food saver and an Xbox 360 gaming system.

To those who study the numbers, it is now obvious that America’s fiscal situation is hopeless. Given the country’s current debt and unfunded liabilities of $75,000,000,000,000, an amount growing by at least $5,000,000,000,000 per year, it will be statistically impossible for the United States to pay its obligations unless it repudiates them in large measure, or the dollar is sacrificed on the altar of searing, society-altering inflation. Congress and much of the nation are in utter denial about the country’s unfolding fiscal catastrophe, as evidenced by federal spending that is actually accelerating, producing all-time debt and deficit records that exceed...

Virginia Slims used to run an ad campaign called, "You've come a long way, baby." The ads for the women's-marketed cigarette brand ran on the theme that it was hip and modern for women to smoke. But the hidden subtext of the campaign was, "Look how far you've come: now you can die a nasty preternatural death of cancer just like the men." In a lot of ways, Barack Obama is the new "You've come a long way, baby" poster boy. He was marketed as the historic first black president in American history - but now that we've come this...

The "bad news on Friday afternoon" rule strikes again. Late this afternoon, the Obama administration announced that it is raising its 10-year budget deficit projection from $7.1 to $9 Trillion. This increase puts the White House in line with the Congressional Budget Office Projection(CBO) of $9.3 trillion. You may remember, during the budget debate the CBO projected that the Obama administration low-balled its stimulus-enhanced deficit by $482 billion over the next four years and $2.3 trillion over the next 10. The President,and his team bashed the CBO for being too conservative. Based on that same Congressional Budget office report next...

In a classic late-Friday afternoon leak -- in an attempt to stay below the media radar -- the Obama administration's Office of Management and Budget plans to say next week that the 10-year budget deficit projection will increase by 2 trillion dollars from the previous 7 trillion dollar estimate. Undaunted by such a cataclysmic figure (it's only 2,ooo BILLION more dollars, after all), Barack Obama continued to press the case for a health care, uh...I mean, health insurance reform package that promises to add at least 1 trillion more dollars to that already impressive estimate. Now, how many here believe...

Check out link:http://www.nytimes.com/aponline/2009/08/21/us/politics/AP-US-Obama-Budget.html?_r=1 WASHINGTON (AP) -- The Obama administration expects the federal deficit over the next decade to be $2 trillion bigger than previously estimated, White House officials said Friday, a setback for a president already facing a Congress and public wary over spending.

Fiscal Policy: New York proposes taxing everything that moves and most things that don't. It's one of 22 states that increased spending this year while running a deficit. So how do you like taxation with representation?A midyear report released this week by the National Governors Association and the National Association of State Budget Officers shows that 36 of the 50 states are facing budget deficits in fiscal 2009. Twenty-two of those states — New York among them — nonetheless have proposed increased spending. In all, 32 states plan increased spending in hard times. In New York, Gov. David Paterson warns...

SACRAMENTO, Calif. – Gov. Arnold Schwarzenegger and California's legislative leaders agreed Monday on a plan to close the state's $26 billion budget shortfall, potentially getting the state back on firm financial ground so it can stop issuing IOUs. The governor and leaders from both parties announced the compromise after more than five hours of closed-door talks. If the agreement survives its run through both houses of the Legislature, it would provide temporary relief to an epic fiscal crisis that has captured national attention, sunk the state's credit rating and forced deep cuts in education and social services.

Do you remember when President Obama said that a majority of economics said they supported Obama's Economic Plan? That was back around the time before your 401K became a 101K. In other words, that was then...this is now. The energy plan and health plans along with the Presidential love fest with organized labor will will end up raising prices on top of the higher taxes. And on top of that almost every economic projection the administration has been too optimistic. When the President presented his budget, the Congressional Budget Office (CBO) projected the 2010 deficit to be 100 billion dollars...

WASHINGTON (MarketWatch) -- The U.S. recorded a federal budget deficit of $94.3 billion in June, pushing the cumulative deficit so far this year to a record $1.08 trillion, the Treasury Department reported Monday. Outlays rose in June to $309.6 billion, while receipts climbed to $215.3 billion in the month. Among the outlays for June is $11.3 billion in Troubled Asset Relief Program funds, the bailout program for banks and U.S. automakers. At this time last year, the cumulative federal budget deficit was just $285.8 billion. The Obama administration expects a deficit of $1.84 trillion for the full fiscal year, which...

Regulation: Ignoring the first rule of holes, a bankrupt state passing out IOUs welcomes an EPA waiver allowing it to further kill its economy. Too bad the state can't stop the air pollution imported from a growing China. The U.S. Environmental Protection Agency on Tuesday granted California its long-standing request — denied by the Bush administration — for a waiver to allow it to impose even more stringent air pollution rules than currently required by the federal government.The way is now clear for implementation of a 2002 state law requiring new cars to increase their fuel economy 40% by 2016....

As governments worldwide try to spend their way out of recession, many countries are finding themselves in the same situation as embattled consumers: paying higher interest rates on their rapidly expanding debt. Increased rates could translate into hundreds of billions of dollars more in government spending for countries like the United States, Britain and Germany. Even a single percentage point increase could cost the Treasury an additional $50 billion annually over a few years — and, eventually, an additional $170 billion annually. This could put unprecedented pressure on other government spending, including social programs and military spending, while also sapping...

... In 2012, federal debt will be more than $15 trillion. Annual interest probably will be between $1 trillion and $1.7 trillion — depending on whether long bonds remain at about 3.5 percent or go to recent historic rates (6 to 7 percent). Deficits will average about $1 trillion a year — $22 trillion by 2019. Yearly interest payments then will be more than $2 trillion. That's the good news. That assumes the world will continue to buy our Treasury notes at plausible rates. We had a slight foretaste of the future last week, when 10-year U.S. Treasury bond yields...

Like the Texas Hold’em player who pushes every last dime into the center of a poker table, the federal government is now “all in” with its commitment to push the national debt to 50% of GDP. The Congressional Budget Office believes that the Treasury will have to borrow nearly $2 trillion this year. None of that is new news, but what is beginning to emerge is a picture of a government which has narrowed its options for improving the economy down to one. Either GDP turns sharply up next year or the deficit will become an unmanageable burden. The Treasury...

Republican strategists have a problem. The scale of what President Barack Obama proposes to do to the American economy is so enormous, so far-reaching and so potentially disastrous that the opposition party is having a hard time describing it. “How do you translate the numbers into something that people can grasp to represent the broader problem?” a Republican pollster asked in a recent conversation. John Boehner, Mitch McConnell and other GOP leaders would love to hear an answer, but the pollster didn’t have one. GOP message mavens are struggling with something that academics call “insensitivity to scope.” It affects us...

... So far, Obama's only proposal for dealing with the funding shortage [caused by Social Security, Medicare, and his new spending] is a tax increase on high earners, leaving "95% of working families" untouched. But the math doesn't work. In 2006, the latest year for which data are available, the top 5% of families took home a whopping 36% of national taxable income, and paid 20% of that, or around $600 billion, in Federal income tax. But even before the president's ambitious health care plan emerges from the Congressional policy grinder, the CBO estimates that his budget plans to spend...

WASHINGTON (MarketWatch) -- The U.S. federal budget deficit rose to a record $956.8 billion in the first six months of the fiscal year after the government stepped up spending to cope with a recession that has depressed tax receipts, the Treasury Department reported Friday.

WASHINGTON (Reuters) – The U.S. budget deficit almost hit $1 trillion during the first six months of this fiscal year which began on October 1, according to estimates released on Monday by the Congressional Budget Office. The government likely recorded $953 billion in red ink from October through March including $290 billion for the Troubled Asset Relief Program, or TARP, which was to provide much-needed cash to struggling financial institutions, the CBO said. Receipts during the six-month period dropped about $160 billion, or 14 percent, over the same period in fiscal 2008. Nearly half of the drop, $73 billion, came...

People who still have jobs are saving a lot of money because they are afraid they are going to lose their job," Dively said. "While that normally is a good thing...in a recession when people are saving money it means they're not spending money. Therefore they're not buying stuff and therefore we're not collecting any sales tax."

In his press conference last Tuesday, Barack Obama said that America must reject the "borrow and spend" policies of the past in favor of a strategy of "save and invest." Sounds good. So why is Obama proposing to borrow and spend more than any president in the history of the republic? Already in the first 45 days of his administration, the federal government has authorized more debt spending than Ronald Reagan did in eight years in office. Then last week the Democrats' own Congressional Budget Office found that the ten-year deficits of the Obama plan will be about $2.3 trillion...

As President Obama prepares to send his budget to Congress next week, he's run into a bit of a stumbling block. The Congressional Budget Office said Friday that the national debt under the president's budget will be $2.3 trillion deeper than the White House estimates. Now for the real bad news: Both estimates are optimistic. If the economy continues to deteriorate faster than economists project, those numbers will balloon further. Over the next decade, the CBO projects that the White House budget will run $9.3 trillion in deficits. The White House projection had been $7 trillion. The problem for Obama,...

WASHINGTON (Reuters) - The Congressional Budget Office is expected to forecast the U.S. budget deficit will likely hit a record $1.8 trillion in fiscal 2009 and $1.4 trillion in fiscal 2010, according to a source familiar with the numbers. That would be up from CBO's January forecast of almost $1.2 trillion for fiscal 2009 and double the $703 billion for fiscal 2010. President Barack Obama in his budget forecast a $1.75 trillion deficit for fiscal 2009 and $1.17 trillion for 2010.

Looking for a source or verification. 1. 40% of all workers in L. A. County ( L. A. County has 10.2 million people)are working for cash and not paying taxes. This is because they are predominantly illegal immigrants working without a green card. 2. 95% of warrants for murder in Los Angeles are for illegal aliens. 3. 75% of people on the most wanted list in Los Angeles are illegal aliens. 4. Over 2/3 of all births in Los Angeles County are to illegal alien Mexicans on Medi-Cal , whose births were paid for by taxpayers. 5. Nearly 35% of...

WASHINGTON (Reuters) - U.S. Treasury Secretary Timothy Geithner on Wednesday blamed soaring budget deficits partly on failure by the former Bush administration to make needed investments in energy security and healthcare. "We begin our time in office after a long period in which our government was unwilling to make the long-term investments required to meet critical challenges in health care, energy and education," he said in prepared remarks to the Senate Finance Committee. The Obama administration is projecting a deficit of $1.8 trillion, or 12.3 percent of gross domestic product, in fiscal 2009, which ends September 30. Geithner said $1.3...

At some point, we will start remembering the difference between a campaign promise, and a presidential decree. You can say just about anything on the campaign trail, and the only people who hear you are your supporters. Now that Obama has the stage of the office of the President - we will hold him to a higher standard than his adulating supporters. We will hold him to his word.

As lawmakers and commentators debated whether President Obama's $787 billion economic stimulus package would effectively combat unemployment and stagnation, less attention was paid to whether it would help trigger something more pernicious. "I think a major inflation is a really big danger of where we stand now," John H. Cochrane, a professor of finance at the University of Chicago's Booth School of Business, told TAS. "It's going to hurt all of us. A big inflation will come with economic chaos on a scale we haven't begun to see yet." It would also hurt President Obama's political standing in a way...

President Obama will try to convince the American people on Tuesday night that he is going to “cut” the deficit in half while he actually increases it. Even if you put all the blame for last year’s deficit ($454 billion) on President Bush, ignoring the fact that Democrats controlled Congress, it is dishonest to blame him for the deficit projected for this year ($1.3 trillion).

China falls into budget deficit as spending balloons China's attempts to spend its way out of economic depression led to a fiscal deficit of 111bn yuan (£12bn) last year. By Malcolm Moore in Shanghai Last Updated: 3:03PM GMT 02 Feb 2009 Despite a near 20pc rise in tax revenues and a record surplus of 1.19 trillion yuan (£128bn) in the first six months of the year, the dramatic scale of government spending in November and December was enough to plunge the entire year into deficit. The figures are the first indication of how quickly and forcefully China reacted to the...

By the time the recession is in full force, Democrats will probably be running the government. Barack Obama will probably be in the White House. Democrats will have a comfortable majority in the House and will control between 56 and 60 seats in the Senate. The party will inherit big deficits. David Leonhardt, my colleague at The Times, estimates that the deficit will sit at around $750 billion next year, or five percent of G.D.P. Democrats had promised to pay for new spending with compensatory cuts, but the economic crisis will dissolve pay-as-you-go vows. New federal spending will come in...

With credit markets in New York in crisis last week, California Gov. Arnold Schwarzenegger sent an extraordinary letter to Treasury Secretary Henry Paulson asking for $7 billion. Although the governor has since withdrawn that request, it testifies to the dire state of his budget. Yet days before penning his note, the governor told an audience at the Commonwealth Club of California not to worry about the state's budget crunch and to approve $9.95 billion in new debt on the November ballot to build a bullet train to connect Los Angeles to San Francisco: "Just because we have a problem with...

A growing number of California voters believe the chronic state budget deficit is a serious problem and lack faith in the ability of the state's political leadership to do anything about it, according to a new Field Poll. The poll also found voter approval of the job that Gov. Arnold Schwarzenegger and the Legislature are doing continues to decline. Field Poll director Mark DiCamillo said voters are becoming increasingly frustrated by the Legislature's inability to pass the budget on time or close the $15 billion deficit. “The public has growing concerns about the budget and less confidence that the Legislature...

California Proposes Sales Tax Hike To Fund Transport, Government Services July 18, 2008 11:32 a.m. ESTVittorio Hernandez - AHN News WriterSacramento, CA (AHN) - To close California's $17.2 billion budget deficit, Gov. Arnold Schwarzenegger considered on Thursday hiking the state sales tax and using funds intended for transportation and government services.State legislators proposed the two measures, which the governor initially described as bad ideas, but he did not rule out adopting the measures to avoid a cash crisis in California.The lawmakers plan to close the budget gap by collecting $5.6 billion income tax increase on the rich and borrowing $1.1...

Time’s up for Chicken Little: Budget shortfall presents opportunity for new leaders to emerge Thomas C. Patterson, Goldwater Institute Daily Email January 29, 2008 The state budget deficit is an opportunity in disguise. The pressure of a multibillion dollar shortfall might enable reforms we wouldn’t have the courage for otherwise. Governor Janet Napolitano, although often cited for her skill in avoiding tax hikes, recently unveiled a couple of particularly bad ideas for “revenue enhancement.” First, she wants to expand photo radar on state highways to generate $90 million of deficit reduction. The governor also recommended ratcheting up the marketing of...

Budget Blues: Budget deficit opportunity for creativity, not inaction By Darcy Olsen After five straight years of being flush with cash, Arizona faces a staggering deficit of about $1 billion. What went wrong? Some analysts point to declining revenue. Revenue growth dropped from 7 percent last year to 1.6 percent this year. But declining revenue is only a piece of the puzzle. Most state economies have been slowing, but Arizona is one of the only states in the red. Extreme spending bears most of the guilt. In just five years, Arizona state government has grown 32 percent, even after adjusting...

Calling Suze Orman, State of the State speech put government first. By Starlee Rhoades What can Arizona lawmakers learn from guru of personal finance Suze Orman? Plenty. Orman's mantra is "people first, then money, then things," which is pretty much the opposite of what we heard on Monday in the Governor's annual State of the State address. Governor Janet Napolitano proposed 12 new government programs and initiatives for the state, in addition to the expansion of several existing programs. These proposed new and expanded programs are offered at a time when Arizona faces a $1.25 billion structural deficit. The new...

I didn't watch the GOP debate today, but I did listen to it. I agree with Dean Barnett - the big loser was Carolyn Washburn, the moderator. Her hectoring attitude, control issues and really stupid questions made this debate the worst of the primary season. Iowa was not well-served by her performance. The winner? Overall, I would say Fred Thompson, because his performance has the potential to invigorate his campaign. His refusal to play the moderator's games was the highlight, but more impressive was his willingness to tell the truth about entitlement reform and the sad state of the budget....

But work on Schwarzenegger's agenda may be overshadowed next year by his failure to resolve the issue that helped bring him into office four years ago in a historic recall election – a chronic budget deficit. The governor entered office facing a $15 billion shortfall in a general fund that spent $79 billion. Avoiding deep spending cuts, Schwarzenegger used a voter-approved, $15 billion bond to plug a hole in a budget he inherited from former Gov. Gray Davis. Increases in tax revenue from a growing economy helped fuel spending since then. Schwarzenegger now faces an estimated shortfall of at least...

Gov. Arnold Schwarzenegger told social service advocates Tuesday that the state's anticipated budget shortfall -- already feared to be the worst since he took office -- has widened to $14 billion, according to people at the meetings. That new figure indicates that the state's fiscal fortunes are declining even more rapidly than many leaders had expected. Less than a month ago, the Legislature's chief budget analyst calculated that California is on track to come up $10 billion short by June 2009, when the state ends its next fiscal year. A $14-billion budget gap would translate to more than 12% of...

When 2008 rolls around, investors who anticipated a capital gains tax exemption on the sale of their investment real estate may run across a kink in their plans. HR 3648, a bill working its way through Congress, would alter the requirements for exemption on primary residences so that many investment properties will no longer qualify, leaving investors to pay a capital gains tax from which they would previously have been exempt.

If someone had told Arnold Schwarzenegger on the day he became governor that the state's revenues would grow by more than $25 billion in his first four years in office, he probably would have laughed at them. If they had then informed him that, despite this 37 percent growth in revenues, he still wouldn't be able to balance the budget, he might have cried. It's been a long, frustrating road for Schwarzenegger since, as a novice candidate straight out of Hollywood, he implied that balancing the budget would be a snap. Just audit the books, teach the "spending addicts" in...

Despite the ongoing costs of US military campaigns in Iraq and Afghanistan, the outlook for the federal budget has grown substantially brighter. Tax revenues are rising much faster than spending, according to Treasury Department numbers released last week. The recent trend is strong enough that, were it to continue, the budget could move into surplus in barely a year, one economist calculates. Already, the federal deficit is shrinking toward about half the size that it has averaged since 1970, when analyzed as a percentage of gross domestic product. The shift reflects a strong economy, with higher incomes and corporate profits...

PROMOTING GOLDMAN ON GOVT TAB by Jim Willie CB December 13, 2006 US Treasury Secy Hank Paulson and USFed Chairman have embarked upon yet another trip to China, joined even by Commerce Secy Gutierrez. This Strategic Economic Dialog between the Untied States and China deserves comment. The official reasons stated are to discuss economic and banking reforms, more like a begging session for China not to torpedo the USEconomy. In my opinion, that is in part a cover smokescreen. Paulson publicly cites the need for China to make quick progress on economic changes toward an open market society, like with...

Oil producers shun dollar By Haig Simonian in Zurich and Javier Blas and Carola Hoyos in London Published: December 10 2006 Oil producing countries have reduced their exposure to the dollar to the lowest level in two years and shifted oil income into euros, yen and sterling, according to new data from the Bank for International Settlements. The revelation in the latest BIS quarterly review, published on Monday, confirms market speculation about a move out of dollars and could put new pressure on the ailing US currency. Market liquidity is traditionally low in December, and many traders have locked in...

WASHINGTON (Reuters) - A slowing economy will cut U.S. tax revenue growth from its surprisingly robust pace of the past year, but the federal budget deficit could still shrink a bit further in fiscal 2007, some economists say. Much depends on how quickly and deeply the economy brakes in coming months, and how this affects corporate earnings -- a big driver behind the 22.3 percent reduction in the deficit to $247.7 billion in fiscal 2006, a figure announced by the Bush administration last week. "As long as we don't find new things to spend money on and we have moderately...

WASHINGTON -- The persistence of big budget deficits raises risks to the country's long-term economic health and they need to be curbed, says Federal Reserve Chairman Ben Bernanke. "The prospective increase in the budget deficit will place at risk future living standards of our country," Bernanke said. "As a result, I think it would be very desirable to take concrete steps to lower the prospective path of the deficit." Bernanke's comments on the budget deficit were contained in a written response to questions raised by Sen. Robert Menendez, D-N.J., after the Fed's chief appearance at a congressional hearing on the...