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Obama Raises '10 Deficit Outlook 19% to $1.5 Trillion
 (Bloomberg) -- U.S. unemployment will surge to 10 percent this year and the budget deficit will be $1.5 trillion next year, both higher than previous Obama administration forecasts because of a recession that was deeper and longer than expected, White House budget chief Peter Orszag said.The Office of Management and Budget forecasts a weaker economic recovery than it saw in May, as the gross domestic product shrinks 2.8 percent this year before expanding 2 percent next year, according to the administration's mid-year economic review issued today. The Congressional Budget Office, in a separate assessment, forecast the economy will grow 2.8 percent next year. Both see the GDP expanding 3.8 percent in 2011. "While the danger of the economy immediately falling into a deep recession has receded, the American economy is still in the midst of a serious economic downturn," the White House report said. "The long-term deficit outlook remains daunting." The budget shortfall for 2010 would mark the second straight year of trillion-dollar deficits. Along with the unemployment numbers, the deficit may weigh on President Barack Obama's drive for his top domestic priority, overhauling the U.S. health care system. "It throws a wrench in health-care reforms," Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, said in an interview. "No matter the specific numbers, they're a constant reminder that we're in bad, bad shape." Posted by: Fred 2009-08-26 |
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