CBO Trims Projected U.S. Deficit Forecast
Tweet
Share
E-mail
The newest congressional budget estimate is predicting a $1.35 trillion deficit for this year according to a report issued on Tuesday as the economic recovery slowly takes shape. Originally the group predict a deficit this year of $1.4 trillion.
The Congressional Budget Office is predicting that the economic recovery will be fragile and slow in 2010, which is not good news for President Barack Obama and his Democratic allies that face midterm elections later this year.
The report is predicting an average unemployment rate of 10.1 percent for the year as a 2 percent grow is all that is expected for the economy. The expected growth is expected to accelerate slightly in the following year with an unemployment rate of 9.5 percent.
The projections for the deficit in the next two years will hold if a number of tax cuts are allowed to expire that were enacted under former President George W. Bush.
The CBO said that the deficit could slide to $480 billion by 2015, if the heavy tax cuts on income, investments and large estates are allowed to expire at year's end. Previous projections were $560 billion.
The deficit is a hot-button issue right now and Democrats in Congress need to take action to keep the favor of the voters.
Obama is expected to propose a spending freeze on Wednesday at his State of the Union Address, but the move will impact a small portion of the overall economy. The freeze will affect the $477 billion available for domestic agencies whose budgets are annually approved by Congress.
The freeze will likely meet opposition in Washington, as many of these agencies and lawmakers have come accustomed to receiving annual increases and will now be asked to cut back.
Among the agencies that would be exempt from the freeze include Homeland Security, the Pentagon and veterans programs.
The savings from this move would likely save $10 billion to $15 billion at first, but potentially over the decade could save the country around $250 billion.
The Congressional Budget Office is predicting that the economic recovery will be fragile and slow in 2010, which is not good news for President Barack Obama and his Democratic allies that face midterm elections later this year.
The report is predicting an average unemployment rate of 10.1 percent for the year as a 2 percent grow is all that is expected for the economy. The expected growth is expected to accelerate slightly in the following year with an unemployment rate of 9.5 percent.
The projections for the deficit in the next two years will hold if a number of tax cuts are allowed to expire that were enacted under former President George W. Bush.
The CBO said that the deficit could slide to $480 billion by 2015, if the heavy tax cuts on income, investments and large estates are allowed to expire at year's end. Previous projections were $560 billion.
The deficit is a hot-button issue right now and Democrats in Congress need to take action to keep the favor of the voters.
Obama is expected to propose a spending freeze on Wednesday at his State of the Union Address, but the move will impact a small portion of the overall economy. The freeze will affect the $477 billion available for domestic agencies whose budgets are annually approved by Congress.
The freeze will likely meet opposition in Washington, as many of these agencies and lawmakers have come accustomed to receiving annual increases and will now be asked to cut back.
Among the agencies that would be exempt from the freeze include Homeland Security, the Pentagon and veterans programs.
The savings from this move would likely save $10 billion to $15 billion at first, but potentially over the decade could save the country around $250 billion.
You May Also Be Interested In
- Mingteng International prices $2.26 million registered direct offering
- Bed Bath & Beyond acquires Installed Right and SFV Services for stock
- Maison Solutions partners with SupplyAi and MiniMax on AI food supply chain
Create E-mail Alert Related Categories
Economic Data, General NewsRelated Entities
Barack ObamaSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
