Budget and Economic Outlook

Doug Elmendorf spoke about the new Congressional Budget Office (CBO) report on the budget and economic outlook. The CBO predicted that the budget deficit for fiscal year 2012 will be $1.1 trillion, and warned Congress of the urgency of addressing the "fiscal cliff," the combination of tax hikes and spending cuts that would take place on January 1, 2013, unless new budget agreements are reached. If Congress does reach an agreement, the CBO estimated gross domestic product (GDP) growth of around 1.7 percent.