WASHINGTON: President Barack Obama on Monday projected the U.S. budget deficit would soar to a fresh record in 2010, challenging his push for fiscal responsibility while driving to defeat double-digit unemployment.
Obama is under pressure to convince investors like China that he has a credible plan to control the country's deficit and debt over time. Polls show voters are also worried by the state of U.S. finances, and he plans to create a bipartisan fiscal commission to figure out future options.
Obama's budget for the fiscal year to Sept. 30, 2011, which must be approved by the U.S. Congress, predicted a deficit of $1.56 trillion in 2010, equal to 10.6 percent of the economy measured by gross domestic product (GDP), the White House said.
This rise was partly due to spending associated with a package of emergency stimulus measures Obama signed last year.
The deficit projection compares with a shortfall of $1.41 trillion in fiscal 2009. The funding gap was forecast to shrink to $1.27 trillion, or 8.3 percent of GDP in 2011, and fall to half that as a share of the economy when Obama's term ends in 2013, meeting a key White House pledge. AGENCIES