(MCT) — WASHINGTON — The federal deficit will dip below $1 trillion for the first time in five years, a substantial improvement in the fiscal outlook, but one that masks a persistent budget gap that likely will worsen later this decade, according to the Congressional Budget Office.

The past two years of budget battles between the White House and congressional Republicans, coupled with the recovering economy, have slowed the government’s gush of red ink. But steps to reduce the deficit have acted as a drag on the economy, slowing the recovery, the budget office said. Automatic spending cuts that are due to take effect March 1 likely would chisel further into economic growth this year and cost about 750,000 jobs, the nonpartisan budget experts project.