CBO: 'Profound' Challenges Ahead Deficit should fall, but employment, growth remain low By Mark Russell, Newser Staff Posted Aug 24, 2011 10:46 AM CDT 18 comments Comments CBO Director Douglas Elmendorf testifying before the Senate Budget Committee on Jan. 28, 2010. The CBO's latest report warns of “profound budgetary and economic challenges” to the US economy. (Getty Images) (Newser) – The picture for 2011 is a glum one—a $1.3 trillion deficit, 9.1% unemployment rate—and it's not going to get much brighter in the next few years, according to a report by the Congressional Budget Office. In it, notes Politico, the CBO warns of "profound budgetary and economic challenges" and growth "well below the economy’s potential." Unemployment won't dip below 8% until 2014, it predicts. The deficit should drop from 8.5% of the GDP this year to 3.2% in 2013, close to its 2.8% average over the past 40 years, the report notes. But those numbers are dependent on a number of what USA Today calls "unlikely" things coming to pass, including an end to the Bush tax cuts, the predicted supercommittee cuts, and a cut in Medicare physician payments.