WASHINGTON (AP) — This year's federal deficit should exceed $300 billion — the largest ever — mainly due to growing defense spending and a limp economy that has depressed government revenue, the Congressional Budget Office said.
The new estimate by Congress' nonpartisan fiscal analyst comes as Republicans try to enact a fresh round of tax cuts they say will stimulate economic activity and generate increased federal revenue. Democrats say the tax reductions will be a boon to the wealthy and make the worsening budget picture even bleaker.
According to the budget analysis, the federal deficit has reached an estimated $202 billion for the first seven months of the government's budget year, which began last Oct. 1. For the same six months last year, the deficit was $65 billion.
"CBO now expects that the government will end 2003 with a deficit of over $300 billion," said the report, which was dated last Friday.
The budget office's figures do not reflect the tax bills Congress is debating. The House version, which would cost $550 billion through 2013, is expected to add $60 billion to this year's shortfall. The Senate's smaller $350 billion measure would deepen this year's deficit by an estimated $44 billion.
Some private analysts have an even bleaker view of the budget, with some envisioning red ink this year totaling $425 billion.
President Bush's budget forecast a $304 billion deficit this year, assuming that all his tax and spending plans were enacted. That number seems virtually certain to be surpassed.
Copyright © 2003 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.