The Congressional Budget Office has just published its new projections. And, thanks to the economic downturn, the news is not good.

President Obama and his advisers had suggested their budget outline would stabilize the government's finances, returning overalld deficits to around 3 percent of GDP within five years. Instead, says CBO, deficits would never dip below 4 percent. And they would reach 5 percent by the end of the decade. 

Here's the Associated Press report. We'll hear more from the administraiton over the course of the day.

In the meantime, here are the questions to ask:

  • What assumptions about future economic growth is the CBO making? If they are more pessimistic than other projections--as they clearly are--whose numbers should we believe?
  • What levels of deficits are unacceptable, both in the immeidate future and in the years that follow?
  • Do higher deficits reduce the need for climate change legislation? For health care reform?

(Yea, you know my answer to the last question. Like Ezra Klein says, you have to spend money to save money.)

Update: More analysis over at the Plank

--Jonathan Cohn