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Bush's Budget Assumes Only 0.7% Real GDP Growth In 2002

By John S. McClenahen By most standards, $9.382 trillion is a lot of money. But that estimate for U.S. inflation-adjusted GDP this calendar year, contained in the fiscal year 2003 federal budget that the Bush Administration submitted this week, is only 0.7% higher than the $9.313 trillion GDP the White House figures the U.S. reached in calendar year 2001. And compared with the 1.9% growth in real GDP that Merrill Lynch & Co., New York is now expecting in calendar 2002, the Administration is decidedly bearish. As for inflation itself, the White House foresees a 1.9% increase in the U.S. Labor Department's Consumer Price Index this year; Merrill Lynch expects a smaller 1.1% rise. Their positions are reversed on unemployment. Merrill Lynch expects joblessness to average 6.4% this year; the Bush Administration anticipates a smaller 5.9%. The bottom line on the budget: an $80 billion deficit, with $2.048 trillion in tax and other receipts not quite keeping pace with the $2.128 trillion in spending the White House proposes for the fiscal year beginning Oct. 1, 2002.

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