The
US will be in the red by almost half a trillion dollars next year thanks
largely to the spiralling cost of involvement in Iraq, a non-partisan
government report says.
In its twice-yearly Budget Outlook, the Congressional Budget Office
says the US will run up a deficit of $480bn in 2004, following a $401bn
deficit this year.
The figures - a new record in dollar terms - are markedly worse than
the CBO predicted in March this year, when the 2003 number was seen at
$246bn.
They suggest a near-$1.4 trillion deficit in the 10 years to 2013 where
they had previously foreseen a surplus of $891bn.
The CBO figures assume that the White House's massive programme of tax
cuts will be temporary, as promised.
If they are made permanent, something many Republicans have sworn to
achieve, the deficit could swell to almost $3 trillion over the 10-year
period.
'Jobless recovery'
The White House insists that its massive tax cuts will underpin a
recovery, and that as individuals and businesses fare better tax revenues
- and the government's fiscal position - will improve.
It has itself predicted a $455bn deficit for this year - the lower CBO
figure is based on predictions of slower-than-expected spending of money
earmarked for Iraq - and $475bn in 2004.
But Democrat opponents of President George W Bush were quick to pin
much of the blame for the deep hole in the budget that the CBO is
predicting on the tax cuts themselves - as well as on the war in Iraq.
And they are likely to focus on another potential stumbling block for
the Bush administration: the CBO's prediction that unemployment is likely
to stay high right through to the next Presidential election in November
2004.
Almost 3 million jobs have been lost in the US in the past three years.
