White House admits Recession worse than previously reported

While I admit there is never a "good" time to admit you're broke, it seems suspicious that the day after the president leaves on vacation and essentially ends press conferences is the day the White House releases a report showing MUCH larger deficits and a FAR worse economy than previously admitted.

http://news.yahoo.com/s/ap/20090825/ap_on_go_pr_wh/us_obama_economy_5

There are two possibilities:
1. The economy was worse than we knew, or
2. The actions taken since the last estimate have made it worse by eroding consumer and lender confidence.

I tend to think the latter is true, but I am certainly open to arguments for #1.