Published On: Thu, Feb 2nd, 2012

US heading for fourth $1tn budget deficit: Congressional Budget Office

US President Barack Obama

US President Barack Obama

Washington (United States) – It appears like United States of America is headed, yet again, for a fourth straight year with a hefty $1 trillion and odd budget deficit. This is according to an economic outlook released by the non-partisan Congressional Budget Office (CBO). The forecast depicts that President Barack Obama’s pledge to cut the deficit in half by the end of his first term is sure to fall short. The report, therefore, provides Republicans ammunition to hammer Obama’s spending record in November’s elections.

Obama’s deficit-cutting goal has fallen short owing to opposition to his proposal of a tax increase on the wealthiest of Americans. Credit rating agencies are yet to express their reaction to the forecast yet. Standard and Poor’s downgraded the US’ top-tier rating during last year’s fight over raising the debt limit.

Credit rating agencies have urged for at least $4 trillion in U.S. deficit reduction over the next decade. Republicans have called the CBO forecast a “harsh indictment” of Obama’s economic policies. Polls have shown unhappiness of Americans with the president’s economic stewardship since he took office in 2009.

“Today’s report is further confirmation that the president’s record has failed to live up to his rhetoric,” said Rep. Jeb Hensarling, Republican-Texas. ”We will not solve this problem unless both sides, Democrats and Republicans, are willing to move off their fixed positions and find common ground,” said Senate Budget Committee Chairman Kent Conrad, D-N.D. “Republicans must be willing to put revenue on the table.”

The White House came to Obama’s defense. It blamed the problem on the recession the president inherited, the tax cut and spending policies pursued by George W. Bush and stiff resistance from Republicans to Obama’s deficit reduction proposals.

White House Spokesman Jay Carney said Obama’s policies are working. Obama had proposed a $4 trillion deficit-reduction plan last September but it stalled amid bickering on Capitol Hill. He has plans to revive it when he proposes his 2013 budget on February 6, White House officials have said.

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