- WASHINGTON (Reuters) - The
U.S. budget gap expanded to $412.55 billion in fiscal 2004, marking the
Bush administration's second-straight record deficit, the Treasury Department
said on Thursday.
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- Though the final 2004 figure was the largest budget deficit
in U.S. history, it was smaller than the White House's most recent forecast
of a $445 billion shortfall given in July and well below the $521 billion
it foresaw early this year.
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- The bipartisan Congressional Budget Office had expected
a $415 billion gap in fiscal 2004, which ended Sept. 30.
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- Thursday's budget announcement came the day after the
third and final debate before the Nov. 2 election, where President Bush
and Sen. John Kerry squared off on domestic issues, including the budget.
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- Treasury also invoked stop-gap accounting measures on
Thursday to avoid piercing the congressionally mandated $7.384 trillion
debt ceiling, which needs to be raised for the third time in three years.
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- The government is just $4 billion below the legal borrowing
limit as of Wednesday, according to the latest data.
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- Congress adjourned three days ago for an election break
without raising the politically sensitive limit. They are expected to address
the issue when they return on Nov. 16.
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- Democrats used the budget and debt limit announcements
to criticize their political opponents' fiscal record in the run-up to
the Nov. 2 presidential election.
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- ``Republicans control the House, the Senate and the White
House but today's release proves once again they have failed to control
the budget every year on their watch,'' said South Carolina Rep. John Spratt,
the top Democrat on the house budget committee.
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- Josh Bolten, head of the White House Office of Management
and Budget, said while the 2004 deficit was ``unwelcome,'' the improvement
from earlier forecasts was ``a clear reflection of our strengthening economy
and improving fiscal performance.''
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- Some analysts suggested the White House may have inflated
its early budget projections.
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- ``OMB from one administration to the next, year in and
year out, puts out pessimistic estimates in August and, with very few exceptions,
they beat them,'' said Lou Crandall, chief economist at Wrightson ICAP
in New York.
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- Treasury also revised up the previous year's budget deficit
to $377.14 billion from a most recent estimate of $374.27 billion. The
fiscal 2003 shortfall was originally reported as a $374.22 billion deficit,
which was then a record.
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- As a percentage of the economy, the yardstick most used
by analysts, the fiscal 2004 deficit totaled 3.6 percent of gross domestic
product -- the largest since 1993, when it was 3.9 percent.
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- The 2003 deficit made up 3.5 percent of GDP after the
revisions, Treasury said.
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- Kerry has accused Bush of fiscal recklessness, faulting
him for turning the budget surpluses he inherited into big budget deficits
through huge tax cuts, which Kerry says are skewed toward the wealthy.
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- ``The fact is that the president is driving the largest
deficits in American history. He's broken the pay-as-you-go rules,'' the
senator said at the Wednesday night debate.
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- Bush countered that his tax cuts were key to reviving
the economy and he warned Kerry's proposals on such issues as health care
would bloat government spending.
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- ``People need to remember: Six months prior to my arrival,
the stock market started to go down. And it was one of the largest declines
in our history. And then we had a recession and we got attacked, which
cost us 1 million jobs,'' Bush said.
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- Both Bush and Kerry have pledged to cut the deficit in
half in five years.
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