From Reuters White House correspondent Jeff Mason's August 20 "analysis" titled: “Obama's deficit woes linger despite rosier estimate”:

A stabilizing U.S. financial sector may have freed the White House to trim its 2009 budget deficit projection but the still-record-breaking figure will not make it easier to sell healthcare reform.

President Barack Obama's administration will lower its budget deficit forecast next week for the current fiscal year to $1.58 trillion from $1.84 trillion after removing $250 billion set aside for bank bailouts, officials said.

The decision shows the administration has enough confidence in the financial sector's strength to forego an option to ask the U.S. Congress for further rescue funds.

But the lower figure's release, which comes at a convenient time for Obama as he tries to overcome critics' concerns about a nearly $1 trillion overhaul of the healthcare system, does not change a key problem: it is still in the trillions of dollars.

“The size of the deficit remains large and most Americans will see it that way,” said Julian Zelizer, a history professor at Princeton University.

“In this case, the devil is not in the details but rather it is in the trillion dollar figure.”

In May, the White House pushed up its budget deficit estimates for the fiscal year ending September 30 to $1.84 trillion -- representing a huge 12.9 percent of gross domestic product.

The latest number, which represents 11.2 percent of GDP, still marks the highest deficit as a percentage of GDP since 1945.

Obama, a Democrat, has pledged to halve the deficit by the end of his four-year term and is eager to remind constituents that he inherited a $1.3 trillion budget hole from his Republican predecessor, George W. Bush.

Audiences at town hall-style meetings often boo when Obama emphasizes that fact and critics have gained traction by arguing that expensive plans to revamp healthcare, improve education and alter U.S. energy usage do not mix well with budget shortfalls.

Previously:

AP falsehood: Obama health plan “would add around $1 trillion to the deficit over the next 10 years”