White House delays budget update

The annual U.S. budget delayed until after Congress votes on a $1 trillion health care overhaul

The White House announced it will release its annual mid-summer budget report in the middle of August. This is one month later than usual, during the Congressional summer recess.

Critics say the delay is an attempt to sidestep the delivery of a sour economic report while Congress is drafting a $1 trillion health care overhaul. Pushing the measure through Congress before the onset of the 7 August recess has been President Obama's top priority in recent weeks.

The Senate health committee narrowly approved a health care overhaul last week, which failed to garner Republican support due to its high price tag. The budget committee is working on its own version of the measure this week.

"Health insurance reform cannot add to our deficit over the next decade, and I mean it," President Obama insisted last week.

The White House released an upbeat forecast for the economy in February and May. The growing deficit and rise in unemployment in the U.S. since then has done little to support the administration's early optimism. The release of a report confirming worsening conditions will serve as yet another contradiction.

The national debt is now $11.6 trillion and the administration forecasts the annual deficit for this year to reach $1.84 trillion, four times that of last year ($455 billion).

Unemployment hit 9.5 per cent last month, even though the Obama administration predicted the number would only peak at 8 or 9 per cent earlier this year. Law-makers expected the $787 billion stimulus package passed last February to help curb the country's growing unemployment rate.

If the August budget report counters these numbers with optimistic forecasts, as it has in the past, the administration will face accusations of manipulating the data for the sake of its own agenda.

On Monday, House Minority Leader John Boehner (R-OH) referred to the budget delay as "an attempt to hide a record-breaking deficit as Democratic leaders break arms to rush through a government takeover of health care."

The Obama camp attributes the delay of the mid-summer budget to the transition between presidential administrations this year and the delay of the previous budget update, which was due in February but released in early May.