White House Predicts 2004 Deficit Of $445 Billion -- the Biggest Ever
The White House forecast yesterday that the U.S. budget deficit for this year will be a highest-ever $445 billion, lower than the administration previously predicted but nearly 20 percent larger than last year's record shortfall.</br></br>President Bush's budget director, while calling the figure "unwelcome," said the new forecast for fiscal 2004 -- in line with recent congressional forecasts -- provides evidence that the economy is growing and tax receipts are recovering. The message echoed a new refrain in Bush's campaign speeches, voiced repeatedly yesterday in Missouri: "We're turning the corner, and we're not turning back."</br></br>But Democrats -- and the campaign of presidential nominee John F. Kerry -- countered that the new estimate looks good only in comparison with a previous estimate of $521 billion that was unrealistically high. They noted that the deficit is still on pace to be $70 billion higher than last year's $375 billion.</br></br>Further clouding the economic picture, the Commerce Department announced that economic growth slowed sharply in the second quarter, to an annual rate of 3 percent, from a revised rate of 4.5 percent in the first quarter. Dragged down by the lowest consumer spending in three years, the quarterly growth rate was the lowest since the first quarter of 2003.</br></br>In addition, the Labor Department announced yesterday that from the start of 2001 to the end of 2003, 11.4 million workers were displaced from jobs -- 5.3 million of them from jobs they had held for three or more years. Though two-thirds of the 5.3 million found new jobs, 57 percent of those who did find work earned less than they had previously.