In an updated estimate, the Congressional Budget Office says that the federal deficit will hit a record $480 billion in fiscal year 2004, more than twice the $200-billion gap CBO had projected in March.
The higher deficit will continue to put pressure on 2004 appropriations for construction and other domestic discretionary programs. Further action on the 2004 spending bills will take place when Congress returns after Labor Day.
The CBO report, released Aug. 26, also says the deficit for fiscal 2003, which ends Sept. 30, will be $401 billion, compared with the $246 billion that CBO projected in its most recent forecast, in March.
CBO does foresee the budget gap narrowing each year from 2005 through 2011. After that, it says the deficit will start to increase again.
House Budget Committee Chairman Jim Nussle (R-Iowa) says, "Deficits do matter--and the current deficit is too big." But Nussle adds that "these are spending-driven deficits." He contends that closing the budget gap "will require a growing economy and controlling runaway government spending....The budget plan we passed does just that."
But the top Democrat on the Senate Budget Committee, Kent Conrad of North Dakota, blamed programs supported by President Bush, including large tax cuts. Conrad argues that Bush "is taking us into a dark, deep hole of deficits and debt that will take generations for our nation to recover from."