- WASHINGTON (Reuters) - The
Congressional Budget Office on Monday forecast a slight improvement in
this year's federal budget deficit, but gave evidence of worsening deficits
over the next decade.
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- In its bi-annual budget outlook, details of which were
obtained by Reuters from congressional sources, the nonpartisan agency
forecast a record federal deficit of $477 billion in 2004, only $3 billion
less than the past forecast made in August.
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- It predicted next year's deficit will total $362 billion,
up from $341 billion predicted in August. Based on current federal spending
plans and tax policy, the deficit is expected to reach nearly $1.89 trillion
between 2005 and 2014, up from prior predictions of $1.4 trillion.
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- The government's previous record deficit of $374 billion,
posted in fiscal year 2003, easily eclipsed the prior high of $290 billion
set in 1992. The shortfall predicted for 2004 would still be less than
levels seen in the early 1980s when considered as a percentage of the size
of the U.S. economy.
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- In recent days, President George W. Bush has begun taking
fire from conservatives within his own party for not laying out concrete
plans to cut government spending and reduce the deficit.
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- That led administration officials to promise Thursday
an effective freeze on federal discretionary spending next year not connected
to defense or homeland security, calling that the foundation of a plan
to halve the deficit in the next five years (see "Bush's budget trick").
Automatic payments such as Social Security and Medicare would not be affected.
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- Congressional and private-sector budget analysts, however,
note the move would save the government only around $8 billion dollars
out of a $2 trillion-plus federal budget -- even if Congress can be made
to swallow the cuts it would require.
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- "It's more like an effort to get through the next
10 days," said Stan Collender, a veteran budget watcher at public
relations firm Fleishman Hillard. "It isn't going to happen."
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