By Arun Kumar
Washington, Jul 24(IANS): Battling the worst recession in decades, the US government expects unemployment to stay at or above 9 percent until 2012 even as the economy grows by at least 4 percent in 2011 and 2012.
New projections contained in the administration's Mid-Session Budget Review released by the White House Friday, also show the US National Debt doubling between now and 2020 when it's forecast to hit over $26 trillion.
The new budget numbers show the debt will top 100 percent of the nation's Gross Domestic Product in 2012. It will stay above 100 percent for the remainder of the decade.
However, the administration estimates the 10-year deficit under President Barack Obama's proposed 2011 budget will be $58 billion less than projected in February when the budget blueprint was first released.
Under the revised estimates, US will ring up $8.474 trillion in deficits between 2011 and 2020, down from the $8.532 trillion estimated in February.
In the near-term, the administration expects the 2010 deficit to come in at $1.47 trillion - slightly lower than originally forecast and slightly above last year's deficit of $1.41 trillion. Meanwhile, the 2011 and 2012 deficits will come in somewhat higher than the White House forecast in February.
"The economy is still weaker than we'd like, and (there is) a medium-term and long-term fiscal situation that requires attention," outgoing White House Budget Director Peter Orszag said in a call with reporters.
In terms of taxes, the administration now expects that the Treasury will take in $402 billion less over the next 10 years than originally expected, but at the same time will also spend $461 billion less than was forecast.
The tax revenue collected will average 18.7 percent a year, slightly above the 40-year historical average. Federal spending, however, will average 23.2 percent, above the 20.7 percent historical average.
Christina Romer, who chairs the president's Council of Economic Advisers, noted that she expected real economic growth to be moderate this year and more rapid for the next two years.
The administration's forecasts assume Obama's proposals will be adopted wholesale by Congress, which is unlikely, CNN said.
On Dec 1, Obama will get a report from his bipartisan fiscal commission, which he has asked to recommend ways to cut the medium- and long-term deficits. He has pledged that he will offer serious deficit reduction plans in his 2012 budget outline.