The U.S. economy faces even more difficult times ahead with chronic unemployment and slow manufacturing hurting the recovery, the head of Congress’ budget agency said on Thursday.
The warning from the non-partisan Congressional Budget Office came on top of more bad economic data that heightened concerns about a return to recession and sent markets roiling. It could also spell trouble for Democrats facing November elections.
The CBO forecast the U.S. budget deficit will hit $1.342 trillion this year, down slightly from its March projection of $1.368 trillion.
It attributed most of the $27 billion change in its fiscal 2010 deficit projection to an estimated $50 billion reduction in the cost of TARP, the U.S. government’s bailout of financial institutions in 2009.
But the figures show that without significant changes in U.S. tax and spending laws, the government will struggle to dig its way out of a deep fiscal deficit hole.
Obama talks deficit, growth
Full story: More tough U.S. economic times forecast by CBO – Yahoo! News