The CBO Budget and Economic Outlook found the $1.1 trillion deficit projected for 2012 is 2 percentage points lower than 2011's and represents 7 percent of gross domestic product.
The CBO report analyzes the nation's fiscal health from 2012 to 2022 and projects a drop in the deficit from 2013 to 2022 under current law, which will see the expiration of certain tax provisions and a rise in revenues as more taxpayers are subject to the alternative minimum tax.
"Those projections are not a forecast of future events; rather, they are intended to provide a benchmark against which potential policy changes can be measured," the CBO said in a blog posting on its Web site. "Therefore, as specified in law, those projections generally incorporate the assumption that current laws are implemented.
"But substantial changes to tax and spending policies are slated to take effect within the next year under current law. ... The decisions made by lawmakers as they confront those policy choices will have a significant impact on budget outcomes in the coming years."
The posting noted if Congress chooses to extend tax breaks and rework the AMT, the deficit will balloon unless spending is cut drastically.
Notable deaths of 2014 [PHOTOS]