White House Slashes Deficit Forecast for '09; Bank Bailouts Not So Costly

The Washington Times (Washington, DC), August 25, 2009 | Go to article overview

White House Slashes Deficit Forecast for '09; Bank Bailouts Not So Costly


Byline: Patrice Hill, THE WASHINGTON TIMES

The White House is reducing its forecast of this year's budget deficit to $1.58 trillion as a result of significantly lower than expected spending on bank bailouts, congressional sources say.

A report due Tuesday from the White House Office of Management and Budget will show that the deficit is lower because of $262 billion less in spending on bank bailouts by the U.S. Treasury and Federal Deposit Insurance Corp. (FDIC) than the administration expected earlier this year, according to a memo written Monday by former Congressional Budget Office Director Douglas Holtz-Eakin that was obtained by The Washington Times.

The administration earlier this year in the midst of the banking crisis expected to spend more than $1 trillion closing some failed banks, bailing out others and helping many financial institutions get rid of toxic loan portfolios.

While the outlook for the deficit in the current fiscal year ending Sept. 30 has improved significantly thanks to reduced spending on banks, it is still on track to rise to a record and to drive unprecedented levels of borrowing by the Treasury in the months ahead.

Spending on bank bailouts slowed abruptly after the Treasury and Federal Reserve announced the results of stress tests on the 19 largest banks in March, providing reassurance to financial markets that the losses those banks were experiencing on mortgages and other loans were manageable. Since that time, major rallies have taken hold in the U.S. stock and credit markets, led by improving sentiment about the stocks and finances of big banks such as JPMorgan Chase & Co. and Bank of America Corp.

The number of bank failures has increased sharply in recent months, but most involve small community banks where the FDIC's exposure to losses is small compared with the cost of bailouts of big banks, totaling more than $50 billion apiece last winter. The White House now expects the FDIC's losses from bank closures to be $78 billion lower than previously estimated, said Mr.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

White House Slashes Deficit Forecast for '09; Bank Bailouts Not So Costly
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.