CBO projects another year of over $1 trillion deficit

This transcript is automatically generated

Good evening I'm Bret -- the countdown clock to the election continues to roll backward one day at a time.

While the federal deficit continues to surge out of control on pace to hit one point one trillion dollars this fiscal year.

That poses a major survival issue for president coming up for reelection in less than eleven weeks.

Chief White House correspondent Ed Henry reports.

It.

It has President Obama made his case in another key battleground the fact is -- everything.

I've done has been focused on how we rebuild.

That's strong middle class back in Washington a much harsher verdict about the fiscal mess the Congressional Budget Office projecting a president who vowed to cut the deficit in half.

We'll now see it exceed a trillion dollars for the fourth straight year we don't know.

How long this can go one for -- -- leaders in both parties failed to stop massive tax increases and automatic spending cuts coming at the end of the year.

There will be short term deficit relief.

But he could spark another recession if allowed to occur those sharp reductions in taxes.

And -- productions in federal spending and soaring increases in taxes will lead to a dramatic reduction in the federal deficit.

Trimming it by almost 500 billion dollars next year.

That would be a significant tightening.

A fiscal policy.

Would probably lead to a reception early next year.

While the president said nothing about the report his aides jumped on it to point out the so called fiscal cliff could be avoided.

If house Republicans joined Democrats in extending the current bush tax rates for the middle class saying quote.

They're willing to hold the middle class hostage in -- we also give massive new tax cuts to millionaires and billionaires tax cuts we can't afford.

Republican Mitt Romney wants all of the bush tax rates extended it charged quote today's CBO report is another indictment of president Obama's economic policies.

That it resulted in overspending increasing debt.

-- a growing financial burden of the next generation just one day after Vice President Biden declared the middle class is coming back.

They have been ravaged.

They have been wrapped.

But -- started to come back.

We've helped them keep their homes.

And -- health care talk of a comeback maybe dampened by the Federal Reserve.

Newly released minutes from their recent meeting show many fed officials believe action will be needed quote.

Fairly soon -- -- incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery.

-- CBO also stressed that if congress can get a debt deal a big if we'd avoid a recession but still be on the verge of a fiscal crisis right now.

Debt is headed for 90%.

Of GDP by 20/20 two fret Ed Henry traveling with the president in Las Vegas and thank you rip.

Watch Live

CBO projects another year of over $1 trillion deficit

Details

Clips

Editor's Picks

Is the Obama administration not pursuing Benghazi clues?

A closer look at Lois Lerner's record

What is the White House really up to?

Gutfeld: Department of Justice vs. Fox News

Rubio: Administration has fostered 'culture of intimidation'

Shepard Smith tours tornado damage from above

Toby Keith: 'Mother Nature is hard to tame'

Megyn Kelly's heated debate with Kermit Gosnell's attorney

GRAPHIC video shows suspect in aftermath of London attack

IRS' Lois Lerner: 'I have not done anything wrong'

Florida shooting possibly linked to Boston bombing suspects

Jodi Arias on media manipulation, message to victim's family

Transcript

Recommended