The White House budget office predicted that the federal government will register a $450 billion deficit this year, and could get bigger.
White House budget experts released the new projection Tuesday, with the warning that the shortfall will keep growing to $475 billion next year. This doesn't include the cost of our missions in Iraq and Afghanistan.
With our plates full with war and homeland security, some level of deficit spending can't be avoided. But the latest figures are astronomical. In February 2002, the White House predicted the budget would come up $80 billion short, a figure that didn't anticipate the Iraq war. But this February it was pegged at $300 billion.
Democrats are jumping all over the news, of course. But influential Republicans are concerned, too.
The political risks here are huge. A ballooning deficit fueled the perception that President George H.W. Bush wasn't engaged in domestic issues, and led to his defeat in 1992. The same could happen to his son.
The Concord Coalition, an independent fiscal watchdog group, says the Republican-dominated government is engaging in a "schizophrenic pursuit." They're right.
President Bush and Congress continue to press tax cuts, but neither side has shown any fervor for real spending reform. The result is the record-setting deficit.
Rolling back tax cuts isn't an option, so the only other way to fix the problem is to cut spending.
Congress needs to be more serious about eliminating waste and should take Sen. John McCain's, R-Ariz., advice and think twice about corporate subsidies like the proposed $21 billion bailout to Boeing.
The Bush administration needs to get serious about involving other countries in peacekeeping costs in Iraq and Afghanistan.
At worst, the deficit will raise interest rates and trigger long-term economic problems for the country. It could also keep an otherwise popular president from a second term.
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