White House: Deficit Will Hit Record $427 Billion

• Bush Aides Say Budget Deficit Will Rise Again [more]
  

The White House will project that this year's federal deficit will hit $427 billion, a senior administration official said Tuesday, a record amount partly driven by wars in Iraq and Afghanistan. The official, among three who briefed reporters on condition of anonymity, said the estimate was a conservative one that assumed some higher spending than other analysts use. Last February, the White House projected that the 2004 shortfall would hit $521 billion, only to see it come in at $412 billion. The official said the figure represented progress because it would be smaller than last year's record $412 billion shortfall when compared to the size of the growing U.S. economy. That ratio is a key measure of the deficit's potency. The nonpartisan Congressional Budget Office said that thanks to tax cuts and hurricane aid passed since its last calculations in September, the 10-year deficit had worsened since then by $503 billion, not counting war expenditures. The congressional analysts projected that this year's deficit would hit $368 billion which would be the third highest ever excluding war costs. Adding expenditures for Iraq and Afghanistan operations would push this year's red ink to about $400 billion, said Congress' nonpartisan budget analyst. [more]