A new estimate predicts the federal budget deficit will hit almost $1.5 trillion this year, a stunning new record. The latest figures from the Congressional Budget Office are up from previous estimates because Congress and President Barack Obama teamed up in December on bipartisan legislation to extend Bush-era tax cuts that were due to expire. The new estimates will only add fuel to a raging debate over cutting spending and looming legislation that's required to allow the government to borrow more money.
The nonpartisan budget agency predicts the deficit will drop to $1.1 trillion next year.
Legislation passed in December to extend tax cuts, unemployment benefits for the long-term jobless and provide a 2 percent payroll tax cut this year adds almost $400 billion to this year's deficit.