Coming on the heels of an anemic 1.5 percent quarterly GDP report, the White House has predicted a $1.2 trillion deficit for 2012.
New figures released Friday by the White confirm federal budget deficit will end up at $1.2 trillion, the fourth consecutive year of trillion dollar-plus deficits during President Barack Obama's administration. President Obama said that he would cut the deficit in half during his 2008 campaign.
The sobering figures come during a heated presidential campaign during which Obama's handling of the economy has been roundly criticized in most major polls. Republican candidate Mitt Romney consistently scores far more favorable results. Corresponding reports that U.S. economic growth slowed to an annual rate of just 1.5 percent in the second quarter of this year show consumers have cut back sharply on spending. During the first quarter the economy poked along at a 2 percent clip, according to a US News report.
The White House budget office now claims the economy will grow at a modest 2.6 percent annual rate this year and that the jobless rate will average 8 percent this year.
"The economic recovery that began in 2009 will continue at a moderate rate and unemployment will gradually decline," Jeffrey Zients, the acting White House budget director said in a blog post. "The economy still faces significant headwinds," he added. This has become the typical White House response through much of Mr. Obama’s tenure.
The 2012 budget year ends on Sept. 30 and The White House also predicted that next year's deficit will fall just short of $1 trillion, which is altered and higher than it predicted in February. The predicted deficit for 2012 was shaved by $116 billion mostly due to Congress not enacting much of Obama's jobs plan.
After campaigning on deficit reduction and walking back deficit-cutting promises for four years, the White House now promises deficits will drop to about 3 percent of the size of the economy by 2017. Obama’s administration claims this is possible due to $1.5 trillion in tax increases planned over the next five years.