Democratic presidential candidate John Kerry (search) seized new predictions of a record federal budget deficit Tuesday to hammer President Bush's (search) economic agenda, accusing the president of taking the country in the wrong direction.

"Only George W. Bush could celebrate over a record budget deficit of $422 billion, a loss of 1.6 million jobs and Medicare premiums that are up by a record 17 percent," Kerry said. "W stands for wrong — the wrong direction for America."

The nonpartisan Congressional Budget Office (search) is predicting that this year's federal deficit will be reach $422 billion, the highest ever but less than the amount analysts predicted earlier this year.

The estimate came as Kerry was talking to North Carolina voters about his plans to fight the forces sending U.S. jobs overseas, a timely topic in a state losing jobs to the manufacturing slump and international competition.

"Because of George Bush's wrong choices, this country is continuing to ship good jobs overseas — jobs with good wages and good benefits," Kerry said in remarks prepared for delivery at town hall meeting. "All across America, companies have shut their doors, putting hardworking people out of a job, leaving entire communities without help or hope."

Kerry was taking his message about jobs and outsourcing to a state with industries vulnerable to international competition, including textiles and apparel. North Carolina is also a state that the campaign sees as competitive territory that could be tipped in Kerry's direction, helped by having North Carolina Sen. John Edwards as his running mate.

Kerry hopes to capitalize on statements made by Bush administration officials to portray the president as unsympathetic to job losses caused by international competition.

Labor Secretary Elaine Tao said during the Republican convention that "the anxiety belies the numbers" that she said show foreign companies create more jobs in the United States than the number lost to foreign workers.

Treasury Secretary John Snow has said job outsourcing (search) is an aspect of trade that "makes the economy stronger."

The Bush-Cheney campaign said Kerry's advisers and business supporters includes "outsourcers" and that his plan would have little effect on the trend.

"John Kerry's own advisers say his tax plan won't stop outsourcing," said spokesman Steve Schmidt. "He has even said he would support companies taking jobs overseas in the normal course of business."

Bush won North Carolina easily four years ago, yet with manufacturing employment in the state down more than 20 percent since 2001, economic woes have eaten into Bush's popularity in the state.

More than 160,000 jobs have been lost, primarily in industries like furniture and textiles where free trade policies (search) have encouraged overseas job flight.

Kerry wants to change tax laws that allow companies to delay paying taxes on money earned abroad, a policy that the Massachusetts senator says gives companies incentives to move jobs out of the United States.

Kerry also wants to give companies a one-time tax holiday to bring money accumulating abroad back into the United States at a reduced tax rate, as a way to spur increased investment in U.S. industry.

The Massachusetts senator would also drop the corporate tax rate from 35 percent to 33.25 percent.

Bush proposed a program to double the number of people served by job training, increase funding for community colleges and create "opportunity zones" of reduced taxes, improved housing and training in places hardest hit by job losses.