A new budget report predicts the government will run a $1.1 trillion deficit in the fiscal year that ends in September, a slight dip from last year but still alarmingly high.

The Congressional Budget Office report also says annual deficits will remain in the $1 trillion range for the next several years if Bush-era tax cuts slated to expire in December are extended.

The CBO study also predicts modest economic growth of 2 percent this year and says the unemployment rate will remain above 8 percent this year. However, that's based on the assumption that President Barack Obama will fail to win renewal of payroll tax cuts and jobless benefits by the end of next month.

The deficit would require the government to borrow 30 cents of every dollar spent.