CBO: Federal Deficit Projected at $1.35T

The latest congressional budget estimates out Tuesday predict a $1.35 trillion deficit for this year as the economy continues to slowly recover from the recession.

President Barack Obama announces economic initiatives for struggling middle class families, Monday, Jan. 25, 2010, in the Eisenhower Executive Office Building across from the White House in Washington. (AP Photo/Charles Dharapak)

(AP)

The Congressional Budget Office report predicts a sluggish economic recovery and continued high deficits that present twin political problems for President Barack Obama and his Democratic allies.

The report sees a slow rebound of the economy, with unemployment averaging 10.1 percent this year as the economy grows by just over 2 percent. It would grow only slightly more next year with an unemployment rate of 9.5 percent.

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