WASHINGTON (Reuters) – The U.S. economy faces difficult times ahead with chronic unemployment and slow manufacturing hurting the pace of recovery, the head of Congress’ budget agency said on Thursday.

The warning from the non-partisan Congressional Budget Office came on top of more bad U.S. economic data that heightened concerns about a return to recession, roiling markets. The gloomy outlook could also spell trouble for Democrats facing November congressional elections.

WASHINGTON (Reuters) – The budget deficit will hit $1.342 trillion this year, the Congressional Budget Office forecast on Thursday, down slightly from its March projection of $1.368 trillion, according to a government source.

CBO, the Congress’ nonpartisan budget analyst, also forecast a $1.066 trillion deficit for fiscal year 2011, which begins on October 1, up slightly from the March estimate of $996 billion.

WASHINGTON, Aug 19 (Reuters) – The U.S. budget deficit will
hit $1.342 trillion this year, the Congressional Budget Office
forecast on Thursday, down slightly from its March projection
of $1.368 trillion, according to a government source.

CBO, the Congress’ nonpartisan budget analyst, also
forecast a $1.066 trillion deficit for fiscal year 2011, which
begins on Oct. 1, up slightly from the March estimate of $996
billion.

WASHINGTON (Reuters) – Senate Republicans blocked a $30-billion plan to help community banks boost lending to small businesses, dealing a blow to President Barack Obama’s election-year battle to reduce unemployment.

Tempers ran high as Democratic leaders failed to muster the 60 votes needed to advance the measure over Republican objections. Republicans were upset that Democrats shut them out from amending the package that also includes about $12 billion in tax breaks for small businesses.

WASHINGTON, July 29 (Reuters) – A U.S. House of
Representatives ethics panel on Thursday began reviewing a
“tentative agreement” to settle charges against Democratic
Representative Charles Rangel, a congressional source said on
Thursday.

The bipartisan panel may need at least a few days to decide
whether to recommend acceptance of the accord negotiated by
attorneys for both sides, the source said.

WASHINGTON, July 28 (Reuters) – A U.S. presidential
commission charged with cutting the budget deficit on Wednesday
discussed the politically charged issue of scrapping or
changing tax breaks that cost about $1 trillion a year.

Senate Budget Committee Chairman Kent Conrad suggested
ending some of the tax breaks as part of a broader effort to
streamline the U.S. tax code to make the economy more
competitive globally and generate revenues without raising tax
rates.

WASHINGTON, July 22 (Reuters) – President Barack Obama on
Thursday signed a bill to restore aid for about 2.5 million
jobless Americans after being handed a setback in his fight
against unemployment when initial claims for benefits surged.

Obama signed the benefits bill for the long-term unemployed
just a hours after the U.S. House of Representatives passed it
on a vote of 272-152. The Democratic-led Congress passed the
bill after the Senate on Wednesday ended a weeks-long partisan
stalemate over the $34 billion cost of the measure and its
impact on deficits and the economy.

WASHINGTON (Reuters) – The Congress voted on Thursday to restore aid for about 2.5 million jobless Americans while President Barack Obama had a setback in his fight against unemployment when initial claims for benefits surged.

The extended benefits for the long-term unemployed cleared the U.S. House of Representatives on a vote of 272-152, a day after the Senate ended a weeks-long partisan stalemate over the $34 billion cost of the measure and its impact on deficits and the economy.