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White House, Congressional Analysts Predict Record Deficit |
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Wednesday, 26 August 2009The White House
The White House and Congressional Budget Office are predicting the U.S.federal deficit will grow to $1.6 trillion in the current fiscal year.
As a share of the economy, that is the biggest federal deficit to hit the United States since World War II.
But the White House and Congress differ over a 10-year forecast for the deficit.
TheWhite House Office of Management and Budget is predicting the federaldeficit will reach $9 trillion in the next decade - $2 trillion higher than its previous estimate.
Meanwhile, thenon-partisan Congressional Budget Office lowered its estimate of thegovernment's 10-year budget deficit to just over $7 trillion.
The lower figure is based on projections of an economic recovery and low inflation.
Thegovernment often operates with a deficit. But the two wars in Iraq andAfghanistan, and the financial crisis, have pushed the deficit to newhighs.
Some economists say the U.S. financial crisis was caused in part by a collapse in the housing market.
Anindex of home prices in 20 major U.S. cities showed Tuesday that homevalues rose for the first time in three years during April, May andJune.
The index - the Standard & Poor's - Case Shillerhousing index - rose nearly three percent from the first quarter. Still,it is down nearly 15 percent from the same period last year.
Asecond report by the Federal Housing Finance Agency shows home pricesrose 0.5 percent from May to June, but fell 6.1 percent from a yearearlier.
Changes in home values can affect consumer spending.Analysts consider a rise in prices a good sign that the market isstarting to recover.
A separate survey released Tuesday bythe U.S. Conference Board says the confidence consumers have in theeconomy and job market improved significantly in August.
TheConsumer Confidence index rose to 54.1 percent, up from 47.4 percent inJuly. The survey associates the number 90 to a healthy economy, and 100to strong growth.
Economists closely watch confidence as anindication of future consumer spending, which accounts for more than 70percent of all U.S. economic activity.
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Wednesday, 26 August 2009
VOA News
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