Budget Office Says Deficit to Hit Record $400 Billion

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A new estimate confirms the nation's bleak budget picture.

The Congressional Budget Office says the government will have generated about $400 billion worth of red ink when the 2008 budget year closes on Sept. 30.

The budget office numbers confirm bleak estimates released by the White House last week that also said the new administration will inherit a record deficit for the upcoming 2009 budget year.

Relative to the size of the economy, the deficits aren't as bad as those experienced in the 1980s and early 1990s. Still, the new figures are so eye-popping in dollar terms that it may restrain the appetite of the next president, who takes office Jan. 20, to add to it with expensive spending programs or new tax cuts.