U.S. Congress Eyes $422 Billion Deficit

By Agence France-Presse The U.S. budget deficit will be a record $422 billion for the fiscal year to Sept. 30, the Congressional Budget Office said Sept. 7. Although the gap is the highest ever in dollar terms, it is slightly below the forecast published in late July by the White House for a $445 billion budget deficit. The deficit projected by the nonpartisan CBO would be 3.6% of the U.S. gross domestic product (GDP), smaller than the deficits of the mid-1980s and early 1990s relative to the size of the economy. The deficit projections also are somewhat lower than those made earlier this year by the CBO and the administration of President George W. Bush, which at one point forecast a gap of $521 billion. The report said improving economic conditions have boosted government revenues since the March forecast, allowing the CBO to cut its projected deficit by $56 billion for 2004. But it also increased its projection for the 10-year deficit by $281 billion, based on inflationary projections, higher defense outlays and other technical revisions. The cumulative deficit for 2005 through 2014 is projected at $2.3 trillion, or 1.5% of total GDP. Copyright Agence France-Presse, 2004