WASHINGTON — The U.S. budget deficit is set to fall to $514 billion this year, down substantially from last year and the lowest level by far since President Barack Obama took office five years ago, a congressional report said Tuesday.
The Congressional Budget Office credits higher tax revenues from the rebounding economy and sharp curbs on agency spending as the chief reason for the deficit's short-term decline.
But the budget experts see the long-term deficit picture worsening by about $100 billion a year through the end of the decade because of slower growth in the economy than they had previously predicted.
Last year's deficit registered $680 billion. Obama inherited an economy in crisis and the first deficits ever to exceed $1 trillion. The 2009 deficit, swelled by the costs of the Wall Street bailout, hit a record $1.4 trillion, while the deficits of 2010 and 2011 both registered $1.3 trillion.
The report predicted the economy will continue to rebound this year and grow at a 3.1 percent rate and by 3.4 percent next year. It foresees the jobless rate holding steady at 6.8 percent this year; the most recent nationwide unemployment rate registered 6.7 percent. It predicts the jobless rate remaining above 6 percent through the remainder of Obama's term.
The agency sees the deficit sliding to $478 billion next year before beginning a steady rise years through 2024 that would bring deficits back above $1 trillion a year.
"CBO expects that economic growth will diminish to a pace that is well below the average seen over the past several decades," the report said.