US Deficit to Hit $1.2 Trillion in 2009

The U.S. federal government will have deficit in fiscal 2009 of more than $1 trillion in the coming fiscal year.

The U.S. budget deficit will be $1.186 trillion in fiscal 2009, the Congressional Budget Office estimated on Wednesday. The figure does not include spending from a proposed economic stimulus package from President-elect Barack Obama worth $775 billion over the next two years.

The CBO expects the deficit will be $703 billion in the 2010 fiscal year, which starts on October 1.

The office also expects the economy will shrink by 2.2 percent in 2009. Growth is expected to resume by 1.5 percent in 2010.

Unemployment will be 8.3 percent in 2009 and 9 percent in 2010.

Expenses contributing to the deficit include a recent economic stimulus package approved by President Bush and Congress worth about $168 billion over two years.

The deficit total over the next five years will be $1.972 trillion, the CBO estimates.