CBO Sees $250B Federal Budget Deficit; More After Stimulus Package

By ANDREW TAYLOR
The Associated Press

WASHINGTON -- The deficit for the current budget year will jump to about $250 billion under Congressional Budget Office figures released Wednesday, as a weaker economy and lower corporate profits weigh on the government's fiscal ledger.

And that figure does not reflect more than $100 billion in red ink from an economic stimulus measure in the works.

"After three years of declining budget deficits, a slowing economy this year will contribute to an increase in the deficit," the CBO report said.

The figure greatly exceeds the $163 billion in red ink registered last year. Adding likely but still unapproved outlays for the wars in Iraq and Afghanistan brings its "baseline" deficit estimate of $219 billion to about $250 billion, the nonpartisan CBO said.

House Budget Committee Chairman John Spratt Jr., D-S.C., said the 2008 deficit might reach $379 billion once the costs of an upcoming economic stimulus measure under negotiation between the Bush administration and Congress are factored in.

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