U.S. deficit estimated at $1.3 trillion this year, CBO says

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The U.S. budget deficit is projected to be $1.3 trillion in the year ending Sept. 30, down from $1.4 trillion forecast in April, because of curbs on federal spending and increased income-tax collections, the Congressional Budget Office said.

The nonpartisan CBO, in its semiannual look at the nation’s fiscal health, projected the deficit for the subsequent 12-month period through Sept. 30, 2012, at $973 billion, rather than the $1.1 trillion forecast in April.

“The economy remains in a severe slump,” CBO Director Douglas Elmendorf wrote on the agency’s website. “CBO expects that the recovery will continue” while the inflation-adjusted gross domestic product “will stay well below the economy’s potential” for several years, he said.

Full story: U.S. Deficit Estimated at $1.3 Trillion This Year, CBO Says – Bloomberg.