WASHINGTON Feb 4 The Congressional Budget
Office on Tuesday reduced its estimate of the U.S. budget
deficit for the current fiscal year but said sluggish economic
growth and stubbornly high unemployment will cause the
improvement to be short-lived.
The CBO said the deficit will fall to $514 billion in the
fiscal 2014 year ended Sept. 30, down from its previous estimate
of $560 billion and a fiscal 2013 deficit of $680 billion.
The deficit will decline to $478 billion in fiscal 2015, but
start to grow thereafter as the economy continues to struggle
with an unemployment rate that fails to fall below 6.0 percent
until late 2016. The number of workers who are not participating
in the labor force also will remain historically high, holding
down revenue gains.
President Barack Obama's signature healthcare law will
contribute to this phenomenon, CBO said, citing new estimates
that the Affordable Care Act will cause a larger than-expected
reduction in working hours - eliminating the equivalent of about
2.3 million workers in 2021 versus a previous estimate of an