DEFICITS FOREVER….The CBO’s latest deficit projections are out, and the press is accurately reporting that they show a reduced deficit for 2005 only because the CBO is projecting zero new expenses for the war in Iraq. Why? Because last year supplemental military appropriations totaled $115 billion and CBO is required by law to extrapolate that into the future. This year ? so far ? there have been no supplemental military appropriations, so CBO is now legally required to extrapolate that into the future.

No, this doesn’t really make sense, but that’s the way it goes. In reality, last year’s deficit was $412 billion, and this year’s deficit is not going to be $368 billion, it’s going to be at least $400 billion and probably higher.

What’s more, the 10-year deficit projection is even worse. The CBO report itself explains all this nicely if you’re willing to wade through the text. If you’re not, I’ve created a handy graphic below.

Bottom line for an apples-to-apples comparison: last September CBO was projecting a 10-year deficit of $861 billion not counting Iraq. Today, CBO is projecting a 10-year deficit of $1,364 billion not counting Iraq. In other words, the projected deficit sans Iraq has gone up 58%.

That’s still a bit of a fiction, since it doesn’t include reasonable assumptions about future tax cuts and spending increases. Those estimates come later in the report. But even without that, the bottom line is that deficit projections continue to get higher and higher. We may soon find out, as Dick Cheney is alleged to have said, whether deficits really matter.

UPDATE: Max has more, including his own estimate of future deficits compared to the official “baseline” estimates CBO is legally required to supply.

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