CBO Expects Deficit to Shatter Record
By ALAN FRAM
WASHINGTON (AP) – The Congressional Budget Office now expects this year’s federal deficit to exceed $400 billion, shattering the previous record even as President Bush and lawmakers consider creating expensive new prescription drug benefits for Medicare recipients.
Only a month ago, the budget office – which is Congress’ top nonpartisan fiscal analyst – said for the first time that it believed this year’s shortfall would exceed $300 billion.
But that projection excluded this year’s price tag of the tax reductions enacted three weeks ago, which totaled $330 billion through 2013. It also failed to reflect an ongoing softness in the economy, which is generating lower federal revenues than the government had anticipated.
