Senate Budget Committee Chairman Sen. KentConrad (D-N.D.), speaks about the Congressional Budget Office's economic outlook during a news conference on Capitol Hill on Wednesday.
From NBC's Alexandra Moe
Both Republicans and Democrats responded to the new Congressional Budget Office (CBO) economic outlook released today that shows the United States continues to face tough economic challenges.
Senate Budget Committee Chairman Kent Conrad (D-ND) emphasized the importance of working together on deficit reduction without threatening the country’s climb out of the recession.
"It is the deteriorating, long-term outlook that is the biggest threat to the country's economic security," Conrad said. All bi-partisan fiscal commissions dealing with the topic, he said, have concluded the same plan: Don't endanger this growing recovery but adopt a plan now that is credible and gets us back on track."
CBO predicts that the budget deficit would jump to nearly $1.5 trillion in 2011 and that unemployment rates will still be high.
"The unemployment rate will only fall to 9.2% in the 4th quarter of this year and 8.2% in the 4th quarter of 2012," CBO Director Douglas Elmendorf said. It would not be until 2016 that the unemployment rate would get down close to the "natural rate" of unemployment.
This report comes the day after President Obama delivered his State of the Union address during which he proposed a five-year spending freeze for many domestic programs while still encouraging investing in education, transportation and renewable energy.
Sen. Orrin Hatch (R-UT) and other Senate republicans announced their support of a Balanced Budget Amendment to the United States Constitution to help bring down the nation's debt.
"It is time to cut spending, not freeze it," Hatch said referring to the president's proposal in his speech last night.
Obama is expected to submit his budget request for fiscal 2012 during the second week of February. The constitutional amendment would require the president to submit a balanced budget to Congress.
Sen. John Cornyn (R-TX) noted that past efforts to pass a balanced budget amendment failed, but the national debt has never been as big as it is now.
"In 1997 when Senator Hatch lead this effort as he is here today, there were 11 Democrats that voted for that joint resolution," Sen. John Cornyn said. "Given the numbers then and the numbers now, I think the case is very compelling and I fully expect that we will have a number of democrats that join us."
But CBO's Elmendorf doesn't think there is one single policy change that could eliminate these fiscal problems. "Unfortunately, it is likely that a return to normal economic conditions will take years," he said.