The federal deficit is falling, but could begin to nudge upward again in 2015, according to CBO data. That means trimming the deficit is important but not urgent, the CBO chief said Wednesday.
Michael Bonfigli/The Christian Science Monitor
Forecasts showing the federal budget deficit will decline for the next several years relative to the size of the economy gives the US “some breathing room” to deal with its fiscal problems, says Congressional Budget Office Director Douglas Elmendorf.
But Mr. Elmendorf, head of the nonpartisan office that provides budget information to lawmakers, added that “it would be a mistake to take that as a sort of all-clear signal” on the need to deal with the nation’s budgetary challenges.
The CBO released its Long Term Budget Outlook Tuesday. It predicted that the government deficit in the budget year ending Sept. 30 will be $642 billion compared with more than $1 trillion in the previous year. The deficit this year is expected to be 4.0 percent of gross domestic product – less than half as large as the shortfall in 2009, which was 10.1 percent of GDP.