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The estimate,
which is $56 billion larger than CBO's forecast in March, shows
the deficit increasing in relation to economic output for the
first time since 2009. CBO said the deficit is expected to be
$152 billion higher than in 2015 and will equal 3.2 percent of
economic output.
The deficit peaked at $1.4 trillion in 2009 and shrank to $485
billion in 2014.
The nonpartisan research agency also said that debt held by the
public will amount to nearly 77 percent of gross domestic
product by the end of 2016, three percentage points higher than
last year and its highest ratio since 1950.
The 2016 federal fiscal year ends Sept. 30.
Revenues have increased by less than 1 percent in 2016, while
government outlays are predicted to rise by 5 percent as a
result of mandatory spending for Social Security and Medicare,
the federal retirement and healthcare programs for the elderly.
The CBO said the forecast indicates tepid U.S. economic growth
of only 1 percent for the first half of calendar year 2016 but
predicted the economy would expand more robustly in coming
months and create growth of 2 percent for the year and 2.4
percent for 2017. Faster growth will spur hiring, increase wages
and put upward pressure on inflation and interest rates.
But over the next 10 years, CBO said economic output would be
restrained by a relatively slow increase in the U.S. labor
supply.
(Reporting by David Morgan; Editing by Chizu Nomiyama and
Alistair Bell)
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