US budget deficit set to hit US$1.3t
Source: Agencies |
August 25, 2011, Thursday
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Print Edition
Print Edition
THE United States federal budget deficit will hit US$1.28 trillion this year, down slightly from the previous two years, with even bigger savings to come over the next decade, according to congressional projections released yesterday.
The nonpartisan Congressional Budget Office said budget deficits will be reduced by a total US$3.3 trillion over the next decade, largely because of the deficit reduction package passed by Congress earlier this month.
Nevertheless, the federal budget will continue to be awash in red ink for years to come. Even with the savings, budget deficits will total nearly US$3.5 trillion over the next decade - more if Bush-era tax cuts scheduled to expire at the end of 2012 are extended.
There is more bad news in the report: CBO projected only modest economic growth over the next few years, with the unemployment rate falling only slightly by the end of 2012. The agency projected an unemployment rate of 8.5 percent for the last four months of 2012. The presidential election is in November of that year.
"The United States is facing profound budgetary and economic challenges," the new CBO report said. "With modest economic growth anticipated for the next few years, CBO expects employment to expand slowly."
At US$1.28 trillion, this year's budget gap would be the third-highest, surpassed only by the deficits in the past two years. This year's deficit projection is US$116 billion lower than the one made by CBO in March. Most of the change is from higher-than-anticipated tax collections.
The nonpartisan Congressional Budget Office said budget deficits will be reduced by a total US$3.3 trillion over the next decade, largely because of the deficit reduction package passed by Congress earlier this month.
Nevertheless, the federal budget will continue to be awash in red ink for years to come. Even with the savings, budget deficits will total nearly US$3.5 trillion over the next decade - more if Bush-era tax cuts scheduled to expire at the end of 2012 are extended.
There is more bad news in the report: CBO projected only modest economic growth over the next few years, with the unemployment rate falling only slightly by the end of 2012. The agency projected an unemployment rate of 8.5 percent for the last four months of 2012. The presidential election is in November of that year.
"The United States is facing profound budgetary and economic challenges," the new CBO report said. "With modest economic growth anticipated for the next few years, CBO expects employment to expand slowly."
At US$1.28 trillion, this year's budget gap would be the third-highest, surpassed only by the deficits in the past two years. This year's deficit projection is US$116 billion lower than the one made by CBO in March. Most of the change is from higher-than-anticipated tax collections.
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