Administration to say 10-year budget deficit will be $2 trillion higher than projected

ABCNews' Matthew Jaffe reports:

Next week the Obama administration will revise its 10-year cumulative budget deficit projection to around $9.1 trillion, up from its earlier projection of $7.1 trillion, an official at the Office of Management & Budget told ABC News on Friday. The $2 trillion revision, first reported by Reuters, stems from new data that showed the downturn was more severe than previously known, an administration official told Reuters. "The new forecasts are based on new data that reflect how severe the economic downturn was in the late fall of last year and the winter of this year," the official told Reuters, adding that the new projections "are now in line with the spring and summer projections that the Congressional Budget Office put out." Also next week, as has been previously reported, the administration will revise its annual budget deficit projection for this year down from $1.84 trillion to $1.58 trillion, since less money than once anticipated has been needed to stabilize the financial system. Still, the rising debt has caused increased concerns among key foreign lenders like China, which in June reduced its holdings of US assets by around $25 billion. - Matthew Jaffe
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