White House predicts record $455b deficit

The White House has forecast the federal budget deficit will explode to an unprecedented $455 billion in 2003, unleashing a political storm between Republicans and Democrats.

    Costly: The Bush war machine proves expensive

    The new forecast is 50% bigger than the Bush administration’s projection five months ago, aggravated by a weak local economy, tax cuts and Washington’s invasion of Iraq.

    The shortfall will balloon again to $475 billion in the next fiscal year, beginning on 1 October.

    Democrats, gearing up for next year’s presidential elections, swiftly pounced on the figures. Former House majority leader Representative Richard Gephardt, a Democrat presidential candidate, described the deficit numbers as a result of US President George Bush’s “abysmal and poor” economic record.

    Democrats also said the figures masked a budget problem far worse than advertised.

    “Total fiction,” said Senator Kent Conrad, a top Democrat on the Senate Budget Committee, of the new Bush numbers. 

    Greenspan supports cuts

    But Federal Reserve Chairman Alan Greenspan told a House committee hearing that he still supports tax cuts to kick-start the lagging economy.

    “Restoring a balanced budget is an important priority for this administration,” said White House budget director Joshua Bolten. “But a balanced budget is not a higher priority than winning the global war on terror, protecting the American homeland or restoring economic growth and job creation.”

    In his first months in office in 2001, Bush predicted federal surpluses totalling $5.6 trillion from 2002 through 2011. Currently, actual deficits and Bush projections total $2.1 trillion in red ink for the first seven years of that period.

    Bolten said the largest factor for the turnabout had been lower revenue and higher spending caused by the weak economy accounting for 53% of the change in the projected 2003 deficit.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    Senegal's village of women

    Senegal's village of women

    Women in northeast Senegal are using solar-powered irrigation to farm food and halt the encroaching desert.

    Inside Baltimore's human trafficking industry

    Inside Baltimore's human trafficking industry

    Survivors of sex trafficking and those who investigate it in the city share their stories.

    Nuclear Gulf: Is Saudi Arabia pushing itself into a nuclear trap?

    Nuclear Gulf: Is Saudi Arabia pushing itself into a nuclear trap?

    MBS is prepared to pursue nuclear weapons if Iran gets them. But could he end up making the kingdom a nuclear pawn?