On September 1, 2011—48 days after it was required to—the Office of Management and Budget (OMB) released its annual Mid-Session Review (MSR), a supplemental update to the president’s budget containing revised estimates of receipts, outlays, budget authority, and the budget deficit for fiscal years 2011 through 2021.  The MSR confirms that the federal government remains on a dangerous fiscal course that will continue to restrain job creation and economic growth.  This review, along with CBO’s August baseline update, both show that three years of unprecedented spending and borrowing have done nothing to boost our flagging economy or create jobs.  Instead, the Democrats’ spending spree has pushed our nation toward the brink of bankruptcy and frozen our economy in a state of uncertainty.

Budget Deficits:

• According to OMB, the FY 2011 budget deficit will total $1.316 trillion or 8.8 percent of GDP, marking the third straight year with deficits in excess of $1 trillion.  Prior to 2009, the highest budget deficit in history was $459 billion. 
• Over ten years, deficits are projected to total $5.755 trillion.  This estimate reflects $1.5 trillion in assumed deficit reduction achieved by the Joint Select Committee on Deficit Reduction.  Without these savings, the ten-year deficit would total $7.255 trillion.

Spending:

• OMB estimates that spending in FY 2011 will total $3.63 trillion or 24.3 percent of GDP.  This would be the third highest spending total in history, eclipsed only by the spending levels in 2009 and 2010.
• Spending is projected to grow each year, reaching $5.603 trillion in 2021, an increase of 54 percent over ten years.

Debt Held by the Public:

• To pay for President Obama’s spending spree, OMB estimates that the debt held by the public will increase from $10.264 trillion in 2011 to $17.137 trillion in 2021, an increase of 67 percent.
• In 2021, OMB estimates that debt held by the public will be 70.5 percent of GDP.

Unemployment:

• According to OMB’s alternative assumptions (based on the “latest available data”), unemployment will average 9.1 percent in 2011, 9 percent in 2012, and 8.5 percent in 2013.
• OMB projects that unemployment will remain high for years to come and will not fall below 8 percent until 2014.  President Obama’s economic advisors promised that unemployment would not exceed 8 percent if the stimulus was passed in February 2009.

Economic Growth:

• OMB predicts (based on their alternative economic assumptions) that real GDP will increase by 1.7 percent in 2011, down from an expected 2.7 percent growth rate in February 2011 when the president’s budget was first released. 
• OMB projects modest economic growth in 2012, with a growth rate of 2.6 percent followed by 3.5 percent in 2013.