September 20, 2020

Budget deficit slips to $1.28T; red ink continues

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WASHINGTON (AP) — After months of unrelieved gloom and discord, Congress and President Barack Obama are starting to make a dent in the federal budget deficit. It’s projected to shrink slightly to $1.28 trillion this year, and bigger savings from this month’s debt ceiling deal are forecast over the next decade.

No one’s celebrating. There will be plenty of red ink for years to come.

The nonpartisan Congressional Budget Office projected Wednesday that annual budget deficits will be reduced by a total of $3.3 trillion over the next decade, largely because of the deficit reduction package passed by Congress earlier this month. The office also forecast persistently high unemployment, a troubling political prospect for President Barack Obama in the crucial months of his campaign to win a second term.

Even with the anticipated big savings, annual budget deficits are expected to total nearly $3.5 trillion over the next decade — and much more if Bush-era tax cuts scheduled to expire at the end of next year are extended. In all, nearly $8.5 trillion would be added to the national debt over the next 10 years if the tax cuts and certain spending programs are kept in place, the budget office report said.

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