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Wed August 22, 2012
Deficit To Be $1.1 Trillion, Unemployment To Stay Above 8 Percent, CBO Says
Expect to hear about this from the campaign of Republican presidential contender Mitt Romney as he continues to take aim at President Obama's record on the budget and the economy:
The Congressional Budget Office reports this morning that "for fiscal year 2012 (which ends on September 30), the federal budget deficit will total $1.1 trillion ... marking the fourth year in a row with a deficit of more than $1 trillion."
Also, the nonpartisan analysis arm of Congress predicts, "the unemployment rate will stay above 8 percent for the rest of the year."
It adds, though, that economic growth should pick up slightly over the rest of the year:
"CBO expects the economic recovery to continue at a modest pace for the remainder of calendar year 2012, with real (inflation-adjusted) GDP growing at an annual rate of about 2¼ percent in the second half of the year, compared with a rate of about 1¾ percent in the first half."
And the $1.1 trillion forecast for the deficit is "down slightly from the $1.2 trillion deficit that CBO projected in March."
CBO also underscores what many economists are warning: that if lawmakers let the federal government go over the so-called fiscal cliff at the end of the year — deep budget cuts combined with the expiration of all the "Bush tax cuts" — the economy will slide into what "will probably be considered a recession" in 2013. The jobless rate, CBO says, would rise to about 9 percent.