Doug Mills / AP Photo
The good news? The CBO’s new estimate for a $1.35 trillion budget deficit in 2010 is down from its earlier estimate of $1.38 trillion. The bad news? “The federal fiscal outlook beyond this year is daunting," CBO Director Doug Elmendorf wrote in his blog on Tuesday. And it could get worse: The CBO’s estimate doesn’t include President Obama’s and many other lawmakers’ plans to extend many of Bush’s tax cuts, nor does it count plans to provide taxpayers with relief from the alternative minimum tax. Both of those measures, if enacted, would add trillions more to the deficits. The CBO also estimates the aggregate deficit over the next decade will be nearly $6 trillion, a level some economists worry is unsustainable and could spark volatility in currency, inflation, and interest rates.