In terms of the overall deleveraging process in the United States, it will be centred first and foremost on the household sector, as we've indicated. There has been a double-digit percentage reduction in the level of household debt in the United States. Unfortunately, it's been done the old-fashioned way; by and large, they defaulted on the debt. It's been more that than the actual build-up of financial assets. That asset build is starting.
In terms of our expectations for the U.S. economy, we expect U.S. household savings rates to be in the neighbourhood of around 5%. You'll see that we believe the U.S. household savings rate was lower than that in the most recent quarter, and that's one of the reasons we see a little less momentum in the U.S. into 2012, as household savings go back to working through deleveraging. Without question, though, what the federal government in the United States does will have a material impact on the economic outlook.
To explain the way our projection is working this time, we are not including any of the provisions of the American Jobs Act in the forecast for the U.S. economy. So there's a little more than 1.2 to 1.3 percentage points of potential growth next year in the U.S., if all aspects of the American Jobs Act were to be passed by Congress. We're including none of that. So one of the things to watch in terms of where the U.S. goes next year is what, if anything, gets passed through that process.
Further on the spending side, as I think you're aware, the spending cuts that are part of the budget deal, including the 50% on the military, we're including because they have been passed. That's legislation until it changes, so we're not trying to read the tea leaves of Congress and adjust accordingly. We will adjust the forecast if there are changes to the spending reductions, and there could be changes that would be net economically positive, less draconian spending reductions—not in the amount, but in the composition of how it's reduced. So we, with others, wait and see.
There is some upside on the fiscal side in the short term for the U.S., depending on how these discussions go in Congress, but we are not counting on them. So for the people of Saskatchewan, if we see budget deals coming out of the U.S., there may be a little more growth that comes from that—but still in the context of overall deleveraging, particularly on the household side.
Let me say one other thing, which goes back to the deleveraging point. One of the issues that can have the biggest impact on the deleveraging side is anything that further facilitates the adjustment to mortgages, the level of--and here I don't want to say the foreclosure process necessarily, but--reworking of the mortgage burden of American households, around a third of whom have negative equity in their homes. This is one of the aspects of that deleveraging that would speed things up and get the U.S. back on its feet sooner. We don't anticipate major moves there, but if we did see something, then it would be material across the country, including Saskatchewan.