U.S. deficit projected to be $1.35 trillion this year
By Bloomberg News
This article was published January 26, 2010 at 11:19 a.m.
PHOTO BY AP / CHARLES DHARAPAK
President Barack Obama announces economic initiatives on Monday, Jan. 25, 2010.
WASHINGTON — The U.S. budget deficit will total $1.35 trillion this year while economic growth will remain “muted” for the next few years, according to the Congressional Budget Office.
The nonpartisan agency said Tuesday in a biannual report on the nation’s budget and economy outlook that the deficit will total 9.2 percent of the economy, slightly smaller than last fiscal year when it reached $1.4 trillion or about 9.9 percent of the nation’s gross domestic product. That was the biggest shortfall since World War II.
The economy will grow by 2.1 percent between the fourth quarter of 2009 and the fourth quarter of this year and by 2.4 percent in 2011, the report said. Unemployment will average 10.1 percent this year and 9.5 percent next year, it said.
The White House says President Barack Obama will propose a three-year freeze on domestic agency budgets, though the savings would barely make a dent. It hasn’t said whether Obama will proposes tax increases or cuts to such programs such Medicare, Medicaid and Social Security.
The three-year spending freeze will be part of the budget Obama will submit Feb. 1, senior administration officials said, commenting on condition of anonymity.
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Information for this article was contributed by The Associated Press.
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