Budget deficit soars
WASHINGTON -- The Bush administration projected today that this year's federal deficit will surge to a record $455 billion, underscoring the toll that recession, tax cuts and the costs of fighting terrorism are taking on the government's books.
The White House also estimated that next year's budget shortfall will hit $475 billion, though the red ink will ease downward to $226 billion in 2008. Those figures accentuate that though the White House expects the huge shortfalls to begin to decline, they remain a long-term concern -- especially with the huge baby boom population ready to start retiring later this decade.
Democrats say the White House projections are probably low because they don't fully account for future spending in Iraq.
The new numbers are certain to throw gasoline on the fight over the budget.
Republicans say the weak economy and the costs of fighting terrorism are to blame, and say the deficit figures underscore the need to restrain federal spending. Democrats say tax cuts pushed by President Bush have worsened the situation.
The previous largest deficit was $290 billion in 1992, under the first President Bush.
Republicans argue that the more important measure of the red ink is how it compares to the size of the U.S. economy. But even gauged that way, a shortfall 4 percent as big as the economy -- as this year's and next year's probably will be -- begins to approach the dimension of the deficits of the 1980s.