profound budgetary and economic challenges

www.politico.com  By SEUNG MIN KIM | 8/24/11 9:40 AM EDT Updated: 8/24/11 3:08 PM EDT

The Congressional Budget Office painted a dreary economic picture Wednesday in a new report that warns of “profound budgetary and economic challenges” ahead.

The national unemployment rate — now at 9.1 percent — isn’t expected to drop below 8 percent until 2014, according to the report on the country’s budget and economic outlook.

This year’s budget deficit is estimated at $1.3 trillion — the third-largest in the past 65 years. And growth is projected to remain “well below the economy’s potential.” The CBO predicts that real GDP will rise 2.3 percent this year and 2.7 percent next year.

“Although economic output began to expand again two years ago, the pace of the recovery has been slow, and the economy remains in a severe slump,” according to the report. “Recent turmoil in financial markets in the United States and overseas threatens to prolong the slump.”

House Speaker John Boehner called the outlook “underwhelming” and blamed President Barack Obama. The jobless rate in 2012 is expected to be 8.7 percent, according to the CBO.