Gulp

The White House is now predicting a deficit of $521 billion for Fiscal 2004, which ends September 30, some $125 billion more than the previous record of $374 billion - which was set last year in Fiscal 2003. This despite limiting non-defense and non-homeland security spending growth to 0.5%, the lowest rate in 10 years.

The Congressional Budget Office predicts a somewhat smaller but still record-smashing deficit, $477 billion, by virtue of somewhat more optimistic assumptions about economic growth.

The CBO projected deficits totalling nearly $2.4 trillion for the 10-year period 2004-2013 not including making tax cuts now planned to expire in 2005 permanent, as Bush wants. That would add an estimated $1.77 trillion to the total.

But it doesn't matter - remember, Dick Cheney told Paul O'Neill that "Reagan proved deficits don't matter." Personally, I assume he meant don't matter to getting reelected.

Remember when Republicans were denouncing Jimmy Carter's deficits - in the $40 billion range - as national disgraces that would ruin the economy?

Footnote: The CBO used a figure of around 4.6% economic growth in arriving at its figures; the White House, likely afraid of getting stung yet again, used a more modest 4.2%. Both may have been too optimistic. The government now reports growth at a 4% annualized rate in the 4th quarter of 2003, with consumer spending up only 2.9%. Which means the deficit would exceed the already-predicted $521 billion record.