Una razon para que bake la confianza, cuatro anios con el deficit arriba de $1 trillon.
ECONOMYJANUARY 31, 2012, 11:20 A.M. ET
Deficit Again Expected to Top $1 Trillion
By KRISTINA PETERSON And DAMIAN PALETTA
WASHINGTON—The federal budget deficit likely will top $1 trillion for the fourth consecutive year in fiscal 2012 as the economy continues to grow at a sluggish pace, the nonpartisan Congressional Budget Office predicted Tuesday.
Congress's official budget scorekeeper projected a sober outlook in its semi-annual report Tuesday, forecasting that the unemployment rate will remain above 8% both this year and next year and above 7% until 2015. The economy will see a "continued slow recovery" as real gross domestic product grows 2% this year, measured from the fourth quarter of the previous calendar year, and by 1.1% next year.
The federal budget deficit is expected to decrease modestly, but the CBO said its outlook hinged on policy and budget choices lawmakers face this year.
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Key Points in CBO Forecast
For example, the deficit will grow by $3.1 trillion over 10 years if spending cuts and tax increases are allowed to go into effect at the end of this year. If they are halted, the deficit would grow by roughly $11 trillion over the next 10 years.
The federal budget shortfall likely will clock in at $1.1 trillion in fiscal year 2012, down slightly from the $1.3 trillion deficit in the previous fiscal year, the CBO projected. Over the next few years, the expected deficits drop significantly, averaging 1.5% of GDP between 2013 and 2022, compared with the fiscal-year 2012 deficit, which is expected to be 7% of GDP.
The deficit is expected to drop as revenues increase, particularly from the scheduled expiration of the Bush-era tax cuts and other tax provisions that recently expired or are scheduled to do so at the end of the year. Alternatively, if tax cuts are continued, if reimbursements to doctors for treating Medicare patients are held at current levels and if Congress prevents automatic spending restrictions from going into effect, the deficit would average 5.4% of GDP between 2013 and 2022.
The CBO said it lowered its projection for economic growth and raised its estimate for the near-term unemployment rate because of a fiscal shock next year caused by steep spending cuts and higher taxes that are scheduled to go into place at the end of 2012.
The CBO also said its economic forecast was more conservative in part because of "diminished near-term prospects for economic growth in other countries."
Write to Kristina Peterson at
kristina.peterson@dowjones.com and Damian Paletta at
damian.paletta@wsj.com