U.S. federal deficit

Congress’ official budget analyst projected Tuesday that this year’s federal deficit will drop to $426 billion, the lowest shortfall of Barack Obama’s presidency.

The home mortgage interest deduction (MID) is up for discussion as lawmakers consider how to rein in the federal deficit.

Congress concluded business Saturday until after the Nov. 6 election, but not before passing a bill to prevent a government shutdown come Oct. 1.

Cuts to federal agencies as a result of sequestration, the automatic budget cuts destined to take place next January, will manifest in unpredictable and sometimes devastating ways said analysts.

The U.S. budget deficit is likely to hit $1.1 trillion in 2012, the Congressional Budget Office (CBO) said in a report, which warned that the fallout from the “fiscal cliff” could be greater than thought.

The Congressional Budget Office warned of explosive growth in national debt if current, unsustainable fiscal policies continue.