WASHINGTON — Government budget watchers received a double dose of bad news yesterday: The speed at which the federal deficit is growing and Social Security reserves are tumbling is accelerating.
A continuing weak economy and last month’s bipartisan tax cut legislation will drive the government’s deficit to a record $1.5 trillion this year, a new government estimate predicts.
The eye-popping numbers mean the government will continue to borrow 40 cents for every dollar it spends.
The new Congressional Budget Office estimates will add fuel to an intense debate over cutting spending and looming legislation that’s required to allow the government to borrow more money as the national debt nears the $14.3 trillion cap set by law.
Republicans controlling the House say there’s no way they’ll raise the limit without significant cuts in spending, starting with a government funding bill that will advance next month.
The budget office analysis predicts the economy will grow by 3.1 percent this year but joblessness will remain above 9 percent. The nonpartisan agency estimates a nationwide unemployment rate of 8.2 percent on Election Day in 2012.
The latest figures are up from previous estimates because of bipartisan legislation passed in December that extended Bush-era tax cuts and unemployment benefits for the long-term jobless, and provided a 2 percent payroll tax cut this year.
That measure added almost $400 billion to this year’s deficit, CBO says.
The deficit is on track to beat the record of $1.4 trillion set in 2009.
That figure reflected huge outlays from the Wall Street bailout.
The nonpartisan budget agency predicts the deficit will drop to $1.1 trillion next year.
“The fiscal challenge confronting us is enormous. To solve this problem, it will require real compromise and a great deal of political will,’’ said Senate Budget Committee chairman Kent Conrad, Democrat of North Dakota.
“We need to have both sides, Democrats and Republicans, willing to move off their fixed positions and find common ground,’’ Conrad said.
On Social Security, new projections show the massive retirement and disability program is already running permanent annual deficits.
Social Security will pay out $45 billion more in benefits this year than it will collect in payroll taxes, further straining the nation’s finances, the projections show.
The deficits will continue until the Social Security trust funds are eventually drained, in about 2037.
Previously, CBO said Social Security would start running permanent deficits in 2016. In the short term, Social Security is suffering from a weak economy that has payroll taxes lagging and applications for benefits rising. In the long term, Social Security will be strained by the growing number of baby boomers retiring and applying for benefits.
The chilling reports come the morning after Obama called for a five-year freeze on domestic agency budgets passed by Congress each year.
But those nondefense programs make up just 18 percent of the $3.7 trillion budget, which means any upcoming deficit reduction package — at least one that begins to significantly slow the gush of red ink — will require politically dangerous curbs to popular benefit programs.
That includes Social Security, Medicare, the Medicaid health care program for the poor and disabled, and food stamps.
Neither Obama nor his GOP rivals on Capitol Hill have yet come forward with specific proposals for cutting such benefit programs.