Congressional Budget Office (CBO) Director Douglas Elmendorf appeared for a second day on Capitol Hill to answer questions about the CBO’s "Budget and Economic Outlook" report. Today, he appeared before the House Budget Committee.
At yesterday's hearing before the Senate Budget Committee, Dir. Elmendorf discussed the fragile economy and the implications of short-term policy decisions, like sequestration, on the fiscal and economic outlook. He also touched on other aspects of his report that provides a budget and economic outlook over the next ten years.
In the CBO's report, released last week, the agency estimates that the deficit will fall below $1 trillion in 2013. The last time the deficit was less than $1 trillion was five years ago.
These estimates assume that the spending cuts scheduled for next month, known as sequestration, will take effect. The report notes that these spending cuts will likely lead to reduced consumer and government spending, at least temporarily.
The report also estimates the U.S. economy will grow by 1.4 percent this year. After this year, economic growth will speed up, CBO projects, causing the unemployment rate to decline and inflation and interest rates to eventually rise from their current low levels.