Washington (AP) -- New budget estimates released Wednesday predict the government's deficit will hit almost $1.5 trillion this year, a new record.
The daunting numbers mean that the government will have to borrow 40 cents for every dollar it spends.
The new Congressional Budget Office estimates will add fuel to a raging debate over cutting spending and looming legislation that's required to allow the government to borrow more money as the national debt nears the $14.3 trillion cap set by law. Republicans controlling the House say there's no way they'll raise the limit without significant cuts in spending, starting with a government funding bill that will advance next month.
The CBO analysis predicts the economy will grow by 3.1 percent this year, but that joblessness will remain above 9 percent this year. Dauntingly for President Obama, the nonpartisan agency estimates a nationwide unemployment rate of 8.2 percent on Election Day in 2012.
The latest figures are up from previous estimates because of bipartisan legislation passed in December that extended Bush-era tax cuts, unemployment benefits for the long-term jobless and provided a 2 percent payroll tax cut this year.
That measure added almost $400 billion to this year's deficit, CBO says.
The deficit is on track to beat the record of $1.4 trillion set in 2009. That figure reflected huge outlays from the Wall St. bailout. The nonpartisan budget agency predicts the deficit will drop to $1.1 trillion next year.
"The fiscal challenge confronting us is enormous. To solve this problem, it will require real compromise and a great deal of political will," said Budget Committee Chairman Kent Conrad, D-N.D. "We need to have both sides, Democrats and Republicans, willing to move off their fixed positions and find common ground."