Tuesday, October 21, 2003

U.S. deficit balloons to record

By Alan Fram
The Associated Press

WASHINGTON - The federal deficit soared to $374.2 billion in 2003, the White House said Monday, a record total that more than doubled last year's red ink and looked like a prelude to even gloomier numbers.

Because the shortfall marked an improvement from a $455 billion projection the White House made in July, Bush administration officials cited it as evidence that their attempts to fortify the weak economy were working.

"Today's budget numbers reinforce the indications we have seen for some months now: that the economy is well on the path to recovery," Treasury Secretary John Snow said.

White House budget director Joshua Bolten said much the same but also conceded that worse fiscal numbers were on the horizon, estimating the gap for the new year "will likely exceed $500 billion even with the strengthening economy." Bolten said spending restraint and policies aimed at bolstering the economy can wrench the budget onto a course to halve deficits by 2009.

Even so, next year's figure could become a political concern for President Bush and Republicans in Congress. With federal budget years running through Sept. 30, next year's figure will be ready less than a month before elections.

Democrats mocked the administration's sunny interpretation and tried to focus attention on the numbers for the budget year just ended. They noted that last year's red ink was more than twice 2002's $158 billion, and surpassed the $290 billion record set in 1992.

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