The deficit for the next fiscal year would reach $977 billion if President Barack Obama's latest budget plan were enacted, the Congressional Budget Office said on Friday, slightly higher than the White House's own estimate. The CBO's much-anticipated analysis of the Obama plan, which would raise taxes on the wealthy and increase near-term spending on infrastructure and education, shows that the fiscal 2014 deficit would also be slightly higher than White House estimates.
But the trend would reverse after that, with the CBO showing slightly lower deficits through 2021.
The CBO estimated a deficits from 2013 through 2022 would total $6.39 trillion, or 3.2 percent of gross domestic product, versus the administration's estimate of $6.68 trillion, or 3.3 percent.
Much of the difference for the 10-year period is from the CBO's projections of slightly lower cost increases for Social Security and Medicare benefits. The CBO also anticipates lower net interest costs on U.S. Treasury debt than the Obama administration.
Outlays for government mortgage agencies Fannie Mae and Freddie Mac and for veterans' pensions also were lower in the CBO analysis.
But with the Obama plan's deficits only falling below a half-trillion dollars for one year in the next 10 - 2017 - the CBO analysis likely will not deter Republicans from their election-year campaign to slam it as a tax-and-spend plan that supports big government.
House of Representatives Budget Committee Chairman Paul Ryan, a Republican, is expected to unveil his own budget plan next week that is expected to seek immediate spending cuts in many programs and longer-term reductions in outlays for Medicare and Social Security.
The CBO analysis confirms that Obama's budget plan would produce higher deficits than those that would occur if current laws were left in place and major tax cuts expire.
(Reporting by David Lawder)