WASHINGTON (Reuters) - Congressional analysts are set to release an authoritative outlook on budget deficits on Thursday as President Barack Obama tries to ease voter anxiety about the spending gaps that some fear may thwart efforts to revive the economy.
The Congressional Budget Office budget and economic outlook is designed to give lawmakers the most up to date nonpartisan assessment of U.S. economic health and provide the latest projections on deficits that began in 2002 under President George W. Bush and then skyrocketed in 2009 during recession and stimulus spending under Obama.
Members of Congress will use the CBO numbers as they decide how to tackle the yawning budget gap.
Polls show Americans are worried about the economy and may punish Democratic congressional and other candidates in November 2 elections because of concern about big government spending and high unemployment.
In financial markets, U.S. government debt prices have risen and yields, which move in the opposite direction, have fallen despite the deficits. The benchmark 10-year Treasury note yield fell to a 17-month low of 2.56 percent this week.
However, some warn Treasury yields could rise sharply if investors lose confidence in Washington's ability to rein in the deficit.
Obama was in Ohio on Wednesday to discuss how to battle long-term deficits without upsetting a tepid economic recovery that is burdened by soft housing markets and slow job growth.
"How do we, over the long term, get control of our deficit?" Obama said at a gathering of about 30 voters in the backyard of a home in Columbus on Wednesday.
"The key is to make sure that we do so in a way that doesn't impede recovery but rather gives people confidence over the medium and the long term."
In July the White House budget office estimated that the deficit for fiscal 2010, which ends September 30, will hit a record $1.47 trillion. It saw the gap between spending and revenues narrowing in fiscal 2011 to $1.42 trillion.
The U.S. budget deficit last year was a record $1.413 trillion, representing about 9.9 percent of gross domestic product.
Investors are focused on the U.S. debt, which has topped $13 trillion, at a time when European governments are emphasizing fiscal consolidation in the aftermath of the financial crisis in Greece.
Obama has appointed a bipartisan commission to study the country's fiscal challenges. Its recommendations are due by year-end and are expected to include a mixture of spending cuts and revenue-boosting tax hikes.
In the run-up to the November elections, Republicans are balking at any deficit-spending to stimulate the economy and are pushing to extend Bush's tax cuts, which expire at the end of this year.
Democrats are worried that premature moves to cut deficits will help push the economy into a double-dip recession. Instead, they are pushing to eliminate tax cuts for the richest Americans to help slow the flow of red ink.
(Reporting by Donna Smith; Additional reporting by Richard Cowan; Editing by Kenneth Barry)
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