Economy, Federal Deficit | featured news

Treasury Secretary Timothy Geithner on Sunday disputed claims that allowing a portion of the Bush tax cuts to expire will choke economic growth, saying the government needs to do the "responsible" thing and show the world it is capable of tackling the deficit.

The new estimates paint a grim unemployment picture as the economy experiences a relatively jobless recovery.

The deficit is the largest relative to the size of the economy since 1945, underscoring the challenge to shrink the fiscal gap even as the White House considers more steps to stimulate a slow recovery.

The estimate, an increase from $7.1 trillion, was blamed on the unexpectedly deep economic downturn.

Federal Reserve Chairman Ben Bernanke on Tuesday urged bold action action to pull the economy out of a deepening slump, even if it means a surge in U.S. government debt.