USA: Congressional Budget Office says the economy will grow slower than anticipated and joblessness will stay high as fallout of the deepest recession since the Great Depression takes its toll
Record ID:
574847
USA: Congressional Budget Office says the economy will grow slower than anticipated and joblessness will stay high as fallout of the deepest recession since the Great Depression takes its toll
- Title: USA: Congressional Budget Office says the economy will grow slower than anticipated and joblessness will stay high as fallout of the deepest recession since the Great Depression takes its toll
- Date: 14th September 2011
- Summary: WASHINGTON, D.C., UNITED STATES (SEPTEMBER 13, 2011) (ORIGINALLY 4:3) (UNRESTRICTED POOL) PROTESTERS, PUBLIC AND JOURNALISTS TAKING PHOTOGRAPHS OF CONGRESSIONAL BUDGET OFFICE (CBO) DIRECTOR DOUGLAS ELMENDORF SHAKING HANDS WITH MEMBERS OF THE CONGRESSIONAL "SUPERCOMMITTEE" PANEL OF CONGRESSIONAL "SUPERCOMMITTEE" MEMBERS ELMENDORF WRITING NOTES COMMITTEE ROOM (SOUNDBITE) (English) CONGRESSIONAL BUDGET OFFICE (CBO) DIRECTOR DOUGLAS ELMENDORF SAYING: "The federal government is confronting significant and fundamental budgetary challenges. If current policies are continued in coming years, the aging of the population and rising costs for health care will push up federal spending measures the share of GDP well above the amount of revenue that the federal government has collected in the past. As a result putting the federal budget on a sustainable path will require significant changes in spending policies, significant changes in tax policies or both. Addressing that formidable challenge is complicated by the current weakness of the economy and the large number of unemployed workers, empty houses and underused factories and offices." PANEL (SOUNDBITE) (English) CONGRESSIONAL BUDGET OFFICE (CBO) DIRECTOR DOUGLAS ELMENDORF SAYING: "In our view, incoming data and other developments since early July suggest that the economic recovery will continue but at a weaker pace than we had anticipated. With output growing at only a modest rate CBO expects employment to expand very slowly, leaving unemployment rate as depicted by the dots in the figure close to nine percent through the end of next year." PANEL
- Embargoed: 29th September 2011 13:00
- Keywords:
- Location: Usa, Usa
- Country: USA
- Topics: Economic News,Politics
- Reuters ID: LVAELEXMC4V9JO543KZVLSLBVAFK
- Story Text: The U.S. economic outlook is gloomy and any drastic action could make things worse, according to testimony Tuesday before a congressional "super committee" trying to cut the federal deficit.
The Congressional Budget Office -- the non-partisan budget and economic analyst for Congress -- said U.S. economic growth would slow from previous estimates and a nagging, 9.1 percent jobless rate would basically remain stuck there through next year's presidential and congressional elections.
"The economic outlook remains highly uncertain," CBO Director Douglas Elmendorf told an inaugural hearing of the congressional panel charged with finding at least $1.2 trillion in new government savings over the next decade.
"If current policies are continued in coming years, the aging of the population and rising costs for health care will push up federal spending measures the share of GDP well above the amount of revenue that the federal government has collected in the past," he added, "As a result putting the federal budget on a sustainable path will require significant changes in spending policies, significant changes in tax policies or both."
Elmendorf said his agency now sees economic growth of around 1.5 percent this year and 2.5 percent in 2012. That's down from CBO's August estimate of 2.3 percent and 2.7 percent, respectively.
New data since CBO pieced together its August outlook contributed to the downward estimates, Elmendorf said.
The U.S. unemployment rate, now at 9.1 percent, will remain "close to 9 percent through the end of 2012," Elmendorf said.
Last month, CBO estimated joblessness at 8.9 percent this year, falling to 8.5 percent in 2012.
The super committee has until Nov. 23 to come up with the savings mandated by a deficit-reduction law enacted in early August.
As it begins its search for either further spending reductions or new tax increases, which are drawing opposition from either Democrats or Republicans, Elmendorf warned the super committee to tread carefully.
"Addressing that formidable challenge is complicated by the current weakness of the economy and the large number of unemployed workers, empty houses and underused factories and offices," Elmendorf told the panel. - Copyright Holder: POOL (CAN SELL)
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