New figures released by the White House predict this year's federal budget deficit will end up at $1.2 trillion.
That would make the fourth consecutive year of trillion dollar-plus deficits during President Barack Obama's administration.
The bleak figures, while expected, are sure to add fuel to the already heated presidential campaign, in which Obama's handling of the economy and the budget are a main topic.
The release came as the government announced that US economic growth slowed to an annual rate of just 1.5 percent in the second quarter of this year, as consumers cut back sharply on spending.
The White House budget office also predicts the economy will grow at a modest 2.6 percent annual rate this year and that the jobless rate will average 8 percent this year.
"The economic recovery that began in 2009 will continue at a moderate rate and unemployment will gradually decline,"
Jeffrey Zients, the acting White House budget director said in a blog post. "The economy still faces significant headwinds," he added. The 2012 budget year ends on 30 September. The White House also predicted that next year's deficit will fall just short of $1 trillion, higher than it predicted in its February budget release.
The predicted deficit for 2012 actually improved by $116 billion, but much of that was because Congress didn't enact much of Obama's jobs plan.
But the White House promises deficits will drop to about 3 percent of the size of the economy by 2017, in part through $1.5 trillion in tax increases over the coming decade.