WASHINGTON – The government ran an estimated $374 billion deficit (search) for the federal fiscal year that just ended, more than double last year's red ink, the Congressional Budget Office (search) said Thursday.
The projection by the nonpartisan office, which analyzes fiscal matters for lawmakers, easily surpasses the record $290 billion shortfall of 1992. It also underscores that federal red ink - and the weak economy that helped cause it - are sure to remain in the political spotlight as the 2004 presidential and congressional elections approach.
"The administration's tax cuts and budget policies have not created jobs as promised, but they have created huge deficits that will stifle growth in the future and burden our children and grandchildren with debt," the House Budget Committee's top Democrat, Rep. John Spratt of South Carolina, said in a statement.
On Wednesday, White House budget director Joshua Bolten (search) told reporters that the 2003 shortfall would be "comfortably under $400 billion." White House budget office spokesman Trent Duffy said President Bush remained on track to cut deficits in half over the next five years by slowing federal spending and stimulating the economy.
"The focus now is on creating jobs, and we're seeing signs the economy is gathering strength," he said.
Final figures for fiscal 2003, which ran through Sept. 30, should be available later this month. The budget office's estimate was based on preliminary data from the Treasury Department.
The estimate was released a day after the White House's Duffy and the Congressional Budget Office's director, Douglas Holtz-Eakin, suggested that the shortfall seemed likely to be in the $380 billion range.
Last summer, the White House projected a 2003 shortfall of $455 billion, while the congressional office estimated one of $401 billion.
The Congressional Budget Office attributed the improved performance to higher than expected revenue collections, especially corporate income taxes. Spending for defense, education, and Medicaid was a bit lower than expected, the congressional office said.
A performance that was better than expected would be a departure from the past two years, when actual figures have been worse than projections from both the White House and the nonpartisan Congressional Budget Office.
Even so, the government is still staring at a gloomy long-term fiscal prognosis that envisions huge annual deficits, including red ink approach $500 billion for 2004.
A $374 billion deficit for 2003 would be 3.5 percent of the U.S. economy - below the 5 percent and 6 percent ratios during some of the worst years of the 1980s and early 1990s.
Four straight years of federal surpluses ended in 2002, when there was a $158 billion deficit.