U.S. budget deficit to dip slightly to $1.1T

A new budget report released this morning predicts the U.S. government will run a $1.1 trillion deficit in the fiscal year that ends in September—a slight dip from last year but still very high by any measure. The Congressional Budget Office report also says annual deficits will remain in the $1 trillion range for the next several years if tax cuts established under former President George W. Bush—slated to expire in December—are extended, as is expected. The report is yet another reminder of the perilous fiscal situation the government is in, but it is commonly assumed that President Barack Obama and lawmakers in Congress will accomplish little on reducing the deficit during this election year. The study also predicts modest economic growth of 2% this year and forecasts that the unemployment rate will remain above 8% this year and next. That’s based on an assumption that President Barack Obama will fail to win renewal of payroll tax cuts and jobless benefits by the end of next month. The agency also predicts unemployment will remain at 7% or above through 2015. The first wave of statements from lawmakers reacting to the report this morning had a familiar ring, with each party casting blame squarely on the other. The Associated Press has the full story here.