The Congressional Budget Office predicted today that the annual federal budget deficit will grow next year from $163B to $219B. The problem is, the deficit for fiscal year 2007 (FY07), which ended September 30, 2007, was nowhere near $163 billion. It was, in fact, over three times that amount.

What accounts for the difference? Retirement programs, such as Social Security, are currently running a huge surplus, all of which is being invested (by federal law) in securities fully backed by the U.S. government -- such as the Treasury Bonds issued to finance the deficit. When those surpluses are factored out, the true operating deficit of the U.S. Government is revealed -- and it hasn't been shrinking.

Based on numbers which anyone can look up at this cool Treasury Dept. website, the deficits for the last six fiscal years are as follows (in billions):

FY02: $420.8
FY03: $555.0
FY04: $595.8
FY05: $553.7
FY06: $574.3
FY07: $500.7

As you can see, while the deficit for FY07 did get a bit smaller, the difference was not only insignificant, but also temporary, as the impending recession, plus the "economic stimulus package," will cause that number to grow to record levels for FY08.

By the way, the actual Treasury deficit for FY01 (the last year for which Bill Clinton had any control) was $13.3B. The year before that it was $17.9B. Note that the FY01 deficit included over a month and a half after the 9/11 attack, and all of the recession -- the two items Bush blamed for the huge deficits he created.