WASHINGTON — Decreased revenues because of a slowing economy, coupled with increased payments from the stimulus payments to taxpayers and the cost of the Iraq war, will result in a record federal deficit of $482 billlion, the Bush administration said today.
The projections, which relate to the fiscal year that starts Oct. 1, are higher than the $407 billion that administration officials projected earlier this year. This year's deficit is projected to be $390 billion.
The deficit could limit the policy of options of the next president. Both Sens. John McCain and Barack Obama have promised tax cuts that could further reduce government revenues. Also, both have talked about the need for additional government spending in certain areas.
Depending on how long the economic slowdown lasts, the deficit could increase even more because of higher costs for federal programs such as food stamps and unemployment insurance.
The biggest budget deficit recorded to date was $413 billion in 2004.
Bush inherited a $132 billion surplus when he took office in January 2001.
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