CBO: Debt to increase by $1.1 trillion in 2012

Prepare for another year of $1 trillion-plus deficits. 

The nonpartisan Congressional Budget Office projected Wednesday that the deficit for 2012 will run $1.1 trillion, the fourth year in a row the shortfall will exceed $1 trillion. 

The projection is down a bit from an earlier estimate pegging the deficit this year at $1.2 trillion. 

The report also warned that a new recession is likely if an ongoing stalemate over tax and spending cuts continues between Democrats and Republicans. 

In its annual summertime report, the budget office said Wednesday that letting decade-old tax Bush tax rates expire and sweeping spending cuts occur in January -- which will happen without congressional action -- "would lead to economic conditions in 2013 that will probably be considered a recession." 

Read more: Fox News