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Budget deficit: Spending, big-time
The federal budget deficit has continued to swell since Obama took office and the president's ambitious agenda could push the national debt even higher in the short term.

The deficit grew by $776.51 billion from January to June, and has already topped $1 trillion since the government's fiscal year started in October. The administration has said it expects the fiscal 2009 deficit to reach $1.75 trillion. That would be 12.3% of U.S. gross domestic product -- the highest since World War II.

The administration maintains that its budget plan will ultimately reduce the deficit over 10 years. "When you have a cataclysmic economic crisis, worries about the deficit have to be set aside," said the Economic Outlook Group's Baumhol.

Still, critics say Obama's plans for reforming health care, improving education and fighting climate change are overly ambitious. "A deficit so large is going to constrain a lot of initiatives and will require higher taxes in the future," said Korok Ray, a former senior economist in the Bush administration and an assistant professor at Georgetown University.

NEXT: Automakers: Bankruptcy and 'Clunkers'

Last updated August 05 2009: 9:07 AM ET
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