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Obama's "Sick" Economy Facing $1.2 Trillion Deficit

Posted Jan 07, 2009 12:57pm EST by Aaron Task in Newsmakers, Recession
Related: ^dji, ^gspc, TLT, SPY, DIA, QQQQ
Making official what Barack Obama forecast earlier, the Congressional Budget Office says the federal deficit will swell to $1.2 trillion in fiscal 2009.

"The economy is very sick," President-elect Obama said earlier this week. "We have to act and act now to break the momentum of this recession."

Obama, who continues to reach out to Congressional leaders and economic advisers - including Ronald Regan's economic guru and former NBER president Marty Feldstein, needs to walk a fine line.

After campaigning on a platform of hope, the President-elect risks being overly dour but wants to make sure the American people (and his political opponents) know that he is inheriting an economy mess. He is also trying hard to craft an economic stimulus package that is big enough to be effective, but also has bipartisan support. One reason he's expected to include a big tax cut in an estimated $775 billion plan is so Republicans can't point fingers (and score political points) if the economy fails to revive sooner vs. later.

To the victor go the spoils.

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