U.S. set for fourth year of $1 trillion-plus deficit: CBO

WASHINGTON (Reuters) - The United States is headed for a fourth straight year with a $1 trillion-plus budget deficit, congressional forecasters said on Tuesday, giving Republicans ammunition to hammer President Barack Obama's spending record in November's elections.

The non-partisan Congressional Budget Office said the fiscal 2012 deficit would rise to $1.079 trillion from its previous estimate of $973 billion made last August. If Congress extends payroll tax cuts through year-end, as expected, the deficit would likely rise by another $100 billion through December.

The CBO report is the opening salvo in the 2012 debate over the appropriate size of the federal government in coming years and whether the wealthy should shoulder more of the burden in fixing a fiscal mess highlighted by a national debt that has topped $15 trillion and is racing higher.

Credit rating agencies did not immediately react to the forecast, but another $1 trillion deficit will do little to aid the U.S. case for regaining its top-tier rating cut by Standard & Poor's during last year's fight over raising the debt limit.

Credit rating agencies have called for at least $4 trillion in U.S. deficit reduction over the next decade but have expressed concern about partisan gridlock in Congress and a lack of political willingness to tackle the issue.

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