CBO Chief Projects Dim Growth, Jobs Outlook

(Newsroom America) -- Congressional Budget Office Director Doug Elmendorf said Wednesday he believes economic growth will slow next year and unemployment will rise during a hearing on the economy and deficits before the House Budget Committee.

"Trillions more dollars will be added to debt in the years ahead, putting a chilling effect on jobs creation today and committing the next generation to a diminished future," Elmendorf said.

Rep. Paul Ryan, R-Wis., chairman of the committee, sounded alarm over the CBO chief's projections, saying 2012 will "will mark the fourth straight year of trillion-dollar deficits."

Democratic Rep. Chris Van Hollen of Maryland, however, said the economic outlook would have been much worse without President Obama's stimulus programs.

"The Recovery Act did serve its purpose. It's kind of like when you're walking up an escalator that's going down very quickly. If you take no action you will go down very fast," Van Hollen said.

Still, analysts say future deficits will depend in large part on how fast the economy grows, something Elmendorf believes will be tame.

"The pace of the recovery has been slow since the recession ended two and a half years ago," Elmendorf said. "And we project that it will continue to be slow for the next two years."

The CBO has projected that economic growth will be just 2.2 percent for the year, followed by an anemic 1.1 percent in 2013. That would mean the unemployment rate would likely rise from its current 8.5 percent to 8.9 percent by year's end, the non-partisan office said.

The CBO projected unemployment to rise to 9.2 percent again in 2013.

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