Deficit to Shrink ... to $1.1T
Congressional Budget Office releases its assessment
By Kevin Spak, Newser User
Posted Jan 31, 2012 11:42 AM CST
Supporters of Mitt Romney stand next to a national debt clock during a rally at Exeter High School on January 8, 2012 in Exeter, New Hampshire.   (Getty Images)

(Newser) – Good news/bad news time. Good news: The deficit will fall this year, thanks to additional tax revenue and major cuts in government spending. Bad news: It's still going to be $1.1 trillion, according to the Congressional Budget Office estimate released today; last year's total was $1.3 trillion. If the figure is accurate, 2012 will be the fourth year in a row that the government has run at least a trillion dollars short, Bloomberg reports.

The CBO is assuming that GDP will grow 2%, but that unemployment will climb to 8.9% from 8.5%. "The federal budget deficit—although starting to shrink—remains very large by historical standards," the report said. How fast it declines will depend in part on the speed of the economic recovery. "Probably more critical, though, will be the fiscal policy choices made by lawmakers," as they face the expiration of the Bush tax cuts and $1 trillion in scheduled automatic spending cuts.

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Showing 3 of 101 comments
anothernewsjunkie
Jan 31, 2012 9:02 PM CST
the deficit could go down to $1 and obama could pay that off with his own dollar and the Republicans would still verbally crucify him
Spudsy
Jan 31, 2012 3:30 PM CST
It takes a long time to repair GOP incompetence.
LoginsSuck
Jan 31, 2012 2:49 PM CST
The deficit will fall this year, GOP: Oh no what has Obama done. $1.1 trillion! It's his fault. See. (many will use this a proof and sadly many will believe them too)