MercoPress. South Atlantic News Agency

Record 2004 US budget deficit, 477 billion

United States will have a new record budget deficit in 2004, estimated by the non partisan Congressional Budget Office, CBO, in 477 billion US dollars, equivalent to 4,2% of GDP, which could expand if greater health spending and tax cuts are approved.

CBO also estimated that the deficit will drop to 362 billion US dollars in 2005 but the accumulated deficit between 2004 and 2013 could reach 2,4 trillion US dollars.

President George Bush who has promised to cut budget deficit by 2009 will be sending his 2005 budget request to Congress next February 2.

The CBO 2004 deficit estimate is similar to the 480 billion US dollars August forecast, however the decade estimate is 71% higher compared to the 1,4 trillion of last August.

However the war on terror and in Iraq that had to be funded with an additional 87 billion, the new Medicare prescription drug benefit with 400 billion over the next ten years, and the big tax cuts passed by the Republican controlled Congress in 2001 and 2003 don't seem very encouraging in spite of vice president Dick Cheney's assertion that the situation was "manageable".

These CBO estimates are based on a 4,8% expansion in 2004 and 4,2% in 2005.

In a recent report IMF warned that the growing US budget and trade deficits could deter private investment, impede long term productivity growth and endanger social security