The budget outlook in the United States is "daunting" and the federal debt will reach about 70 percent of gross domestic product (GDP), the highest level since World War II, according to a report released by the U.S. Congressional Budget Office (CBO) Wednesday.

"Recently, the federal government has been recording budget deficits that are the largest as a share of the economy since 1945," the CBO's 2011 Long-Term Budget Outlook report said. "Consequently, the amount of federal debt held by the public has surged."

The CBO said, at the end of 2008, that debt equaled 40 percent of the nation's annual economic output. Since then, the figure had shot upward.

The sharp rise in debt stemmed partly from lower tax revenues and higher federal spending related to the recent severe recession. However, the growing debt also reflected an imbalance between spending and revenues that predated the recession, the report said.

The CBO said, as the economy continued to recover and the policies adopted to counteract the recession phased out, budget deficits would probably decline markedly in the next few years.

"But the budget outlook, for both the coming decade and beyond, is daunting," it said.

The report said spending on social welfare in an aging society accounted for an increasing proportion of the federal deficit.

The retirement of the baby-boom generation, people aged around 60, portended a significant and sustained increase in the share of the population receiving benefits from Social Security, Medicare, and Medicaid, it said.

Moreover, per capita spending for health care was likely to continue rising faster than spending per person on other goods and services.

The soaring deficit has triggered hot debate between the two parties. Republicans insist the White House needs to deeply cut spending, while the Obama administration and Democrats argue that too deep a cut will sacrifice the nascent recovery.

The U.S. public debt surged after the financial crisis and economic recession. The federal government annual deficit hit 1.41 trillion U.S. dollars in 2009 fiscal year and 1.29 trillion dollars in 2010 fiscal year.

In a recent report, the U.S. Treasury Department estimated the federal deficit in full fiscal year 2011 would reach 1.65 trillion dollars, a record high level.

VietNamNet/Xinhuanet