Quote:CBO warns of 'profound' challenges

SEUNG MIN KIM | 8/24/11 9:40 AM EDT Updated: 8/24/11 3:08 PM EDT

The Congressional Budget Office painted a dreary economic picture Wednesday in a new report that warns of “profound budgetary and economic challenges” ahead.

The national unemployment rate — now at 9.1 percent — isn’t expected to drop below 8 percent until 2014, according to the report on the country’s budget and economic outlook.


This year’s budget deficit is estimated at $1.3 trillion — the third-largest in the past 65 years. And growth is projected to remain “well below the economy’s potential.” The CBO predicts that real GDP will rise 2.3 percent this year and 2.7 percent next year.

“Although economic output began to expand again two years ago, the pace of the recovery has been slow, and the economy remains in a severe slump,” according to the report. “Recent turmoil in financial markets in the United States and overseas threatens to prolong the slump.”

House Speaker John Boehner called the outlook “underwhelming” and blamed President Barack Obama. The jobless rate in 2012 is expected to be 8.7 percent, according to the CBO.

“The CBO update is further confirmation of the need for the president to abandon his reliance on short-term fixes and ‘stimulus’ spending gimmicks, and work with us to remove government barriers that are standing in the way of long-term job growth,” Boehner said in a statement.

The CBO notes that deficits will drop noticeably in the next couple of years under the measures outlined in the debt ceiling package and if the Bush tax cuts expire in 2012, as scheduled.

This year, the deficit equals about 8.5 percent of GDP, according to the CBO. But next year, the deficit will drop to about 6.2 percent of GDP and 3.2 percent of GDP in 2013. The average annual deficit measured over the past 40 years is about 2.8 percent.

Deficits will add up to $3.5 trillion over the next decade – a significant drop from what the CBO had predicted just five months ago, which was $6.7 trillion in the same time period. The CBO report credits much of that decrease to the cuts outlined in the debt-ceiling law, but CBO director Doug Elmendorf noted to reporters that the latest numbers were “still well above what the country has experienced in the last several decades.”

House Budget Committee Chairman Paul Ryan noted that the deficit cuts enacted under the debt ceiling deal was “only a first step."


Read more: http://www.politico.com/news/stories/081...z1W0Ofcp25

(08-24-2011 09:58 PM)gruehls Wrote:  

Quote:CBO warns of 'profound' challenges

SEUNG MIN KIM | 8/24/11 9:40 AM EDT Updated: 8/24/11 3:08 PM EDT

The Congressional Budget Office painted a dreary economic picture Wednesday in a new report that warns of “profound budgetary and economic challenges” ahead.

The national unemployment rate — now at 9.1 percent — isn’t expected to drop below 8 percent until 2014, according to the report on the country’s budget and economic outlook.


This year’s budget deficit is estimated at $1.3 trillion — the third-largest in the past 65 years. And growth is projected to remain “well below the economy’s potential.” The CBO predicts that real GDP will rise 2.3 percent this year and 2.7 percent next year.

“Although economic output began to expand again two years ago, the pace of the recovery has been slow, and the economy remains in a severe slump,” according to the report. “Recent turmoil in financial markets in the United States and overseas threatens to prolong the slump.”

House Speaker John Boehner called the outlook “underwhelming” and blamed President Barack Obama. The jobless rate in 2012 is expected to be 8.7 percent, according to the CBO.

“The CBO update is further confirmation of the need for the president to abandon his reliance on short-term fixes and ‘stimulus’ spending gimmicks, and work with us to remove government barriers that are standing in the way of long-term job growth,” Boehner said in a statement.

The CBO notes that deficits will drop noticeably in the next couple of years under the measures outlined in the debt ceiling package and if the Bush tax cuts expire in 2012, as scheduled.

This year, the deficit equals about 8.5 percent of GDP, according to the CBO. But next year, the deficit will drop to about 6.2 percent of GDP and 3.2 percent of GDP in 2013. The average annual deficit measured over the past 40 years is about 2.8 percent.

Deficits will add up to $3.5 trillion over the next decade – a significant drop from what the CBO had predicted just five months ago, which was $6.7 trillion in the same time period. The CBO report credits much of that decrease to the cuts outlined in the debt-ceiling law, but CBO director Doug Elmendorf noted to reporters that the latest numbers were “still well above what the country has experienced in the last several decades.”

House Budget Committee Chairman Paul Ryan noted that the deficit cuts enacted under the debt ceiling deal was “only a first step."


Read more: http://www.politico.com/news/stories/081...z1W0Ofcp25