New deficit projections could slow Obama’s agenda

The White House on Tuesday said U.S. unemployment would be higher and the budget deficit larger than previously thought, which could slow President Barack Obama’s drive to push his domestic policy plans through a skeptical Congress.

The White House deficit projections now lie closer to those of the independent Congressional Budget Office, but these will also be updated later on Tuesday and may paint an even grimmer picture.

The administration’s midsession budget review also predicted a return to positive U.S. growth by end-2009, as the worst recession since the Great Depression ends, and lifted the pace of economic activity that it expects between 2011-2016.

Obama’s central policy priority of overhauling the U.S. healthcare system has already run into trouble, caused by an angry backlash from critics who complain its $1 trillion pricetag is too high and who worry it will limit choice.

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