WASHINGTON, Aug. 11 (UPI) -- The federal budget deficit is likely to increase as the recession in the United States continues to shrink the federal tax base, economists said.
"This is going to be a very depressing outlook," former Congressional Budget Office director Douglas Holtz-Eakin told USA Today Tuesday.
With stimulus spending scheduled to increase and unemployment at 9.4 percent, the federal deficit is expected to jump to $1.7 trillion or $1.8 trillion this year, four times the federal deficit of 2008, the newspaper reported.
With the gross domestic product predicted to contract 2.6 percent in 2009, tax revenues should decline by $353 billion over the first 10 months of the year.
In an Internet posting in July, White House Budget Director Peter Orszag wrote, "the deficit picture is very challenging."
Sen. Sen. Judd Gregg, R-N.H., the highest ranking Republican on the Senate Budget Committee, took the sentiment a step further. At "previously unthinkable levels," the deficit "shows an incredible lack of fiscal responsibility," he said.