AP: “Government to report on $1 trillion-plus deficit”
Get the latest intel on Washington's fiscal woes.Close
Below is an excerpt; please click here to read the entire article.
The Obama administration is projecting that the deficit for the 2011 budget year, which began on Oct. 1, will climb to $1.4 trillion. Over the next decade, it will total $8.47 trillion. Deficits of that size will constrain the administration’s agenda over the next two years and will certainly be an issue in the 2012 presidential race.
Top economists with the National Association for Business Economics forecast this week that the 2011 deficit will total $1.2 trillion, only slightly better than the administration’s estimate. These analysts pinpointed excessive federal debt as their single greatest concern, even more so than high unemployment.
Obama has appointed a bipartisan commission to study the deficit and recommend policy changes. Those recommendations are expected in December, after the elections, and the panel needs the backing of 14 of its 18 members to trigger a congressional vote.
“If we get to 2013 and policymakers don’t look like they have a credible plan to deal with the deficit, then interest rates are likely to rise significantly and that will jeopardize the recovery we have under way at that time,” said Mark Zandi, chief economist at Moody’s Analytics.