For the fourth year since the financial crisis of 2008, the deficit will exceed $1 trillion, at $1.2 trillion for the fiscal year ending Sept. 30, according to the president’s Office of Management and Budget. That is $116 billion lower than the $1.3 trillion deficit that the administration forecast in February in President Obama’s annual budget.

The new figure equals 7.8 percent of the size of the economy, down from the February projection of a deficit equivalent to 8.5 percent of the gross domestic product. Economists generally say deficits should not exceed 3 percent of gross domestic product in a country with a stable economy, and the administration continues to project that the deficit will fall to just below that level by 2017, and remain there through the decade.

In the decade from fiscal years 2013 to 2022, total deficits will be $240 billion lower than projected in February, according to the budget office.

Such reductions would have been heralded as significant not many years ago. But in the post-crisis context of annual trillion-dollar deficits, those amounts are widely seen as woefully insufficient for addressing the country’s budgetary imbalance. By all accounts, the next few years of declining deficits will be followed by years in which deficits will send the overall debt to unsustainable heights as the large baby boom generation ages, qualifying for ever-costlier medical benefits.

The lowered deficit projection for this year reflects budget analysts’ forecast, based on economic and technical factors, that revenues will be $27 billion less than expected but that spending will be $143 billion less, for a net deficit reduction of $116 billion.

The nonpartisan Congressional Budget Office separately will release its budget update in August.

Republicans in Congress pounced on the report to attack Mr. Obama’s fiscal record. With an eye to the elections, Representative Paul D. Ryan, a Republican of Wisconsin who is chairman of the House Budget Committee, said, “We can no longer afford a president and a U.S. Senate that refuse to get serious about tackling our generation’s defining challenge.”

Yet under Mr. Ryan’s budget plan, annual deficits would persist for decades because his proposed tax cuts would offset deep spending cuts. 

(Bolding and italics are mine.)

See remainder of article at:  http://www.nytimes.com/2012/07/28/us/politics/white-house-lowers-projected-deficits-for-2012-and-beyond.html?_r=0