The federal budget deficit is expected to drop below $1 trillion for the first time since President Barack Obama took office, according to a new report on Tuesday by the Congressional Business Office (CBO).
The analysis by the CBO stated that the government will run a $845 billion deficit for 2013, an improvement when compared to the $1.1 trillion shortfall from last year.
The Huffington Post reports that this year’s shortfall will still require the government to borrow 24 cents for every dollar that it spends.
The CBO projected that the economy will also see a slow growth this year of just 1.4 percent, should the March 1 $85 billion in spending cuts go through.
They also expect unemployment to stay around eight percent. President Obama is looking to ease the March 1 cuts and replace them with new tax revenue and alternative cuts.
The report also predicted that the budget deficit will fall to $430 billion by 2015. That number is the lowest since the government posted a $459 billion deficit during President George W. Bush’s final year in office.
CNBC notes that Senate Budget Committee Chairman Patty Murray (D-WA) stated:
“We need to continue working to cut spending responsibly, protect and strengthen programs like Medicare, and raise revenue by closing tax loopholes that the wealthiest Americans and biggest corporations take advantage of.”
While the economy is only expected to grow 1.4 percent in 2013, it is expected to recover to 3.4 percent in 2014. The budget report added that unemployment will likely stay above 7.5 percent through at least next year. The CBO also warns that future growth may be constrained if the government doesn’t work to reduce future deficits.
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