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Friday, March 5, 2010

CBO: deficits over next decade $1.2 trillion higher than White House estimated.

President Barack Obama's budget would increase the U.S. deficit in 2011 to 2020 by $1.2 trillion more than the White House has forecast, the Congressional Budget Office said on Friday.

The CBO report fueled immediate criticism from Republicans who said Obama was raising government debt to "alarming" levels.

"Measured relative to the size of the economy, the deficit under the President's proposals would fall to about 4 percent of GDP (Gross Domestic Product) by 2014 but would rise steadily thereafter," the CBO said in a preliminary analysis.

CBO forecast the deficit in fiscal year 2010 under Obama's proposal at $1.5 trillion, which it said was "$56 billion less than the administration's figure, largely because of differences in baseline estimates of spending."

"In contrast, largely because it projects lower baseline revenues in future years, CBO estimates deficits that are $75 billion higher for 2011 and $1.2 trillion greater over the 2011-2020 period than what the administration anticipates under the President's budget," CBO said.

When he unveiled his budget for fiscal 2011 in early February, Obama pledged to cut the U.S. deficit in half by the end of his first term, but made tackling high unemployment his immediate priority.

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