The President’s Midsession Review, released this week, projects the 2013 deficit to be lower by $214 billion compared with the earlier Obama budget estimate released in April. But any hurrah would be misplaced.

Most of the short-term improvement comes because revenue from the tax increases passed in December 2012 is coming in more strongly than the Office of Management and Budget (OMB) anticipated, Fannie Mae and Freddie Mac are paying greater dividends to the Treasury, and sequestration is taking effect.

But our debt situation has worsened since before the recession. Public trustee for Medicare and Social Security Charles Blahous writes:

The fiscal picture has grown so much worse that federal debt as a percentage of GDP has already far surpassed levels that the dire projections of late 2007 didn’t foresee happening until more than a decade from now. By any objective measure, if the fiscal picture was serious in late 2007 and warranted substantial deficit-reduction measures, it is far more serious now and requires more aggressive corrections.…

The last few years of massive deficit spending have objectively made our fiscal situation much more problematic. But at the same time, they have caused the large deficits we now continue to run to be misperceived by some as a return to reasonable fiscal health.

Rationally, it cannot be the case that our fiscal situation was made better by being made worse. But that is exactly the misperception that our last few years of massive deficit spending have apparently created in some quarters.

So it is with these latest budget projections released by the White House. Over the next decade, OMB actually revised deficit projections upward by more than half a trillion dollars. The important fact that many reporters and lawmakers seem to be missing is that national debt is dangerously high and growing.

As Congress continues budgeting this summer during the federal appropriations process, there are ample opportunities to reduce spending in discretionary programs to meet spending caps under sequestration and more. Examples are here and here.

But trimming discretionary spending down to size will only do so much for as long as President Obama and Congress put off fixing the entitlements. There are six bipartisan entitlement reforms Congress and the President can implement right away. And the Heritage plan, Saving the American Dream, lays out a comprehensive approach that shows the way toward a balanced budget in less than 10 years without raising taxes while fully funding national defense.

The President and Congress have their work cut out for them, and the solutions are ready at hand. But taking corrective action first requires that they recognize our fiscal outlook for what it truly is.