August 22, 2012
President Obama and Congress are flirting with both a recession and a bigger jump in unemployment next year unless they head off looming tax increases and spending cuts — but doing so could mean a fifth straight year of trillion-dollar deficits, the government’s chief budget scorekeeper said Wednesday.
The latest update by the Congressional Budget Office shows the time for hard choices that lawmakers have feared for years is now here: Leaders must choose between economic pain and budget-tightening now, or continuing to bolster the U.S. economy with the risk of a bigger fiscal collapse later.
In the near term, the federal government will run a $1.1 trillion deficit in fiscal year 2012, notching its fourth straight year of trillion-dollar deficits, dating back to the end of President George W. Bush’s term and covering all of President Obama’s three-and-a-half years in office.
“The future path’s of federal deficits and debt are especially uncertain now because they will depend crucially on how lawmakers address looming tax and spending decisions,” the CBO said in its report.
This article was posted: Wednesday, August 22, 2012 at 6:04 am