Federal deficits and debt are declining, but economic growth is slowing and unemployment will remain above 8% next year.

That's the new set of projections from the White House budget office, which revised its February budget Thursday to reflect new policies and forecasts.

The good news: Spending cuts this year and plans for a lot more in coming years have reduced annual deficits significantly. This year's is down from $1.6 trillion to $1.3 trillion. Next year's is predicted to be $950 billion, rather than $1.1 trillion.

Down the road, the revised budget shows annual deficits dipping below $500 billion, to about 2.2% of the economy. Earlier, it had been forecast to remain above $600 billion. Over the full decade, deficits are projected to drop by $1.45 trillion.

The cumulative national debt also is a bit less daunting in the revised budget. It would be $16.1 trillion next year, rising to $24 trillion in 2021. That's less than what was projected in February.

The causes for the good news: spending cuts enacted this year and the deficit reduction law passed last month. In addition, Obama's plan to let George W. Bush's tax cuts for upper-income taxpayers expire after 2012 would reduce future deficits. Total savings from all that: more than $3 trillion over 10 years.

Now the bad news: The economy remains sloooow. The new document predicts 3.3% growth next year, not the 3.6% originally forecast. It's not projected to get above 4% in the near future, whereas in February it was forecast to get to 4.4% in 2013. And some economists might color all those figures rosy.

The budget shows slightly better unemployment projections, however -- 8.3% next year, down from the earlier 8.6% prediction. It's forecast to reach a low of 5.2% later in the decade.

For Budget Director Jacob Lew, it's a far cry from the last time he worked on a mid-session review in the Clinton administration.

"The last time I did a mid-session review, it showed a pretty substantial surplus," he said.

It didn't take long for Republicans to blast the new budget report as unrealistic in its economic projections and indicative of a failed presidency.

"By its own admission, the Obama administration's record on job creation and fiscal responsibility is abysmal," said House Budget Committee chairman Paul Ryan, R-Wis.

"Today's report confirms that the president's policies have failed to deliver on his promises of job creation, deficit reduction, and much-needed economic growth. Since taking office, the president's policies have made a difficult situation worse."

Deficit watchdog groups were skeptical of the White House numbers, which assume Congress will approve another $1.5 trillion in deficit cuts this fall, upper-income tax cuts will expire after 2012, spending caps will be honored and the wars in Iraq and Afghanistan wound down in short order.

"These projections bank on a lot of savings not yet in place, and even then, the debt is too high," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.