CBO Warns of Higher Unemployment: Washington Worries About the Deficit

By Dean Baker - August 24, 2009, 4:28PM

The Congressional Budget Office (CBO) will release a new set of economic and budget projections for the next decade on Tuesday. These projections are likely to show a cumulative deficit over the next 10 years that is $2 trillion higher (@ 1 percent of GDP) than the deficit CBO projected in January.

The reason for the higher projected deficit is not that Congress has suddenly blown another 2 trillion of the taxpayers' dollars on frivolous projects. Rather, the main reason for the jump in the projected deficit is that CBO is now projecting lower growth and higher unemployment over this decade than it did last January.