WASHINGTON -- The federal deficit is likely to continue its slide -- to a lower-than-expected $514 billion for 2014, the nonpartisan
However, the nation's sluggish economy still poses long-term budget challenges for
Thanks to budget slashing and improved tax revenues, the years of record-high red ink, which ran at $1 trillion annually during the recession, appear to have receded for the foreseeable future. The deficit is now back to historical averages of about 3% of the nation's gross domestic product, the budget office reported.
But the economy's projected growth is less than once hoped, at a time when the nation's population is aging and will continue to put pressure on federal programs, such as Medicare.
Although public concern over federal spending does not dominate the polls as it did just a few years ago, the accumulated debt has continued to mount.
Nevertheless, the CBO said the economy will continue to have some "slack," with a projected 6% jobless rate for the decade. The combination of an aging population and a decline in workforce participation is expected to shave economic growth.
Overall, the "slack" in the economy means the budget office has revised its growth expectations and that lower revenues are projected to send deficits climbing again in a few years.