plans are finalized and submitted to supervisors. the substantial progress these firms have made in meeting their required capital buffers, and their success in raising private capital, suggests that investors are gaining greater confidence in the banking system. fiscal policy in the current economic and financial environment let me now turn to fiscal matters. as you are well aware, in february of this year, the congress passed the american recovery and reinvestment act, or arra, a major fiscal package aimed at strengthening near - term economic activity. the package included personal tax cuts and increases in transfer payments intended to stimulate household spending, incentives for business investment, increases in federal purchases, and federal grants for state and local governments. predicting the effects of these fiscal actions on economic activity is difficult, especially in light of the unusual economic circumstances that we face. for example, households confronted with declining incomes and limited access to credit might be expected to spend most of their tax cuts ; then again, heightened economic uncertainties and the desire to increase precautionary saving or pay down debt might reduce households ’ propensity to spend. likewise, it is difficult to judge how quickly funds dedicated to infrastructure needs and other longer - term projects will be spent and how large any follow - on effects will be. the congressional budget office ( cbo ) has constructed a range of estimates of the effects of the stimulus package on real gdp and employment that appropriately reflects these uncertainties. according to the cbo's estimates, by the end of 2010, the stimulus package could boost the level of real gdp between about 1 percent and a little more than 3 percent and the level of employment by between roughly 1 million and 3 - 1 / 2 million jobs. the increases in spending and reductions in taxes associated with the fiscal package and the financial stabilization program, along with the losses in revenues and increases in income - support payments associated with the weak economy, will widen the federal budget deficit substantially this year. the administration recently submitted a proposed budget that projects the federal deficit to reach about $ 1. 8 trillion this fiscal year before declining to $ 1. 3 trillion in 2010 and roughly $ 900 billion in 2011. as a consequence of this elevated level of borrowing, the ratio of federal debt held by the public to nominal gdp is likely to move up from about 40 percent before the onset of the financial crisis to about 70 percent in 2011. these developments would leave the debt - to - gdp ratio at its highest level since the early 1950s, the years following the massive debt build

made significant progress, and we expect to begin publishing soon a monthly report on the fed's balance sheet and lending programs that will summarize and discuss recent developments and provide considerable new information concerning the number of borrowers at our various facilities, the concentration of borrowing, and the collateral pledged. in addition, the reports will provide quarterly updates of key elements of the federal reserve's annual financial statements, including information regarding the system open market account portfolio, our loan programs, and the special purpose vehicles that are consolidated on the balance sheet of the federal reserve bank of new york. we hope that this information will be helpful to the congress and others with an interest in the federal reserve's actions to address the financial crisis and the economic downturn. we will continue to look for opportunities to broaden the scope of the information and supporting analysis that we provide to the public. ben s. bernanke ( 2009 ), " the economic outlook, " statement before the joint economic committee, u. s. congress, may 5.