WASHINGTON — The federal budget deficit should soar to a record $482 billion in fiscal 2009, the White House said Monday, because of slow economic growth and taxpayer rebates.
The new figure, far above the $407 billion for fiscal 2009 that President Bush projected six months ago, would shatter the record of $413 billion set in fiscal 2004. This year's deficit is expected to be $389 billion.
The numbers mean that the next president will begin his term facing intense pressure to find new revenue or cut spending dramatically.
Presumptive Democratic presidential nominee Barack Obama met Monday with top economic advisers, including veterans of the Clinton administration Cabinet, to discuss economic alternatives.
Jason Furman, Obama's economic policy director, said the latest data confirmed that "these have been years of unprecedented fiscal irresponsibility." He charged that presumptive Republican nominee John McCain is "proposing to continue the same Bush economic policies that put our economy on this dangerous path and that will drive America even deeper into debt."
McCain countered with a reminder of his pledge to balance the budget by 2013, a promise that most analysts say is nearly impossible to keep without significant changes in Social Security, Medicare or Medicaid, none of which McCain has proposed to do.
Like Obama, McCain offered no specifics Monday, saying only that "Today's news makes that job (of balancing the budget) harder, but should not change our resolve to make the tough decisions and the genuine effort to reach across the aisle."
White House Budget Director Jim Nussle tried to ease the pain, saying that Bush's plan to balance the budget by 2012 remained intact.
"The important point to remember is that near-term deficits are both temporary and manageable if and only if we keep spending in check, the tax burden low and the economy growing," Nussle said.
The economy grew at only a 1 percent rate in the first quarter of this year, after growing 0.6 percent in the fourth quarter of 2007. Ed Lazear, the chairman of the Council of Economic Advisers, said Monday that he expected the gross domestic product — the value of the nation's goods and services produced this year — to go up 1.6 percent.
The announcement triggered the usual Washington sniping.
"Today's budget projections by OMB are simply further evidence that the Bush administration is the most fiscally irresponsible administration in American history," said House Majority Leader Steny Hoyer, D-Md.
"Let no one be mistaken: The vast majority of this record deficit is attributable to policies enacted by the former Republican majorities in Congress and signed into law by President Bush."
Nussle countered that it's the Democratic-controlled Congress that's stifling progress.
"Excessive spending beyond the president's budget plan will make the problem worse," he said, "and it already appears that congressional Democrats are lining up to bust through the president's budget, and for that matter bust through their own budget."