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Budget Deficit to Set Record

Bush's $80-billion request for Iraq and Afghanistan would result in a shortfall of $427 billion. Analysts say the gap will worsen.

THE NATION

January 26, 2005|Joel Havemann, Mark Mazzetti and Maura Reynolds, Times Staff Writers

WASHINGTON — White House officials said Tuesday that this year's budget deficit would reach a high of $427 billion, propelled by President Bush's request for an additional $80 billion for war costs in Iraq and Afghanistan.

Separately, congressional analysts forecast a generally worsening budget outlook, saying the federal deficit would become a knottier problem in the next 10 years.


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Together, the developments suggested Bush would have a harder time than previously thought in keeping his promise to cut the deficit in half by the end of his presidency. White House officials said, however, that they would still meet that goal.

On Capitol Hill, the news caused Republicans and Democrats to wring their hands.

"Difficult debates and choices are at our doorstep," said Sen. Judd Gregg (R-N.H.), chairman of the Senate Budget Committee and an administration ally who has called for new controls on entitlement spending. "If we do nothing, our kids and grandkids will be overwhelmed by the cost of our inaction."

Bush on Feb. 7 will send Congress his proposed budget for the fiscal year that begins in October -- setting off a debate among Republican lawmakers on how to balance the competing goals of deficit reduction, extending the president's tax cuts and approving an overhaul of Social Security that could cost more than $1 trillion.

In July, the administration had projected this year's budget deficit would hit $331 billion. The deficit last year was $412 billion, a record.

As U.S. troops fight deadly, rear-guard insurgencies in Afghanistan and Iraq, the cost of the conflicts has far exceeded initial predictions from senior Bush administration officials.

The president's request for additional war funding -- if approved as expected -- would bring the total authorized for the current fiscal year to $105 billion, compared to $87 billion last year for military operations and reconstruction aid in Iraq and Afghanistan.

The new request also would raise the total cost of military operations since Sept. 11, 2001, to about $280 billion, far exceeding many initial estimates.

Larry Lindsey, then-director of the president's National Economic Council, estimated before the Iraq war began that its total cost would be $100 billion to $200 billion.

The estimates were dismissed by other administration officials as too high, and Lindsey was fired shortly afterward.

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