Budget Deficit Likely Doubled for Fiscal '08

By PATRICK YOEST
Wall Street Journal
September 10, 2008

WASHINGTON -- The Congressional Budget Office said the U.S. budget deficit for fiscal 2008 -- $407 billion -- will be more than double the deficit for 2007, hit by the wars and a weak economy, and predicted it is likely to rise further in fiscal 2009.

"The figures make it challenging to avoid playing the dismal economist," said CBO director Peter Orszag in a statement.

The agency foresees an increase to $438 billion by fiscal 2009, which begins Oct. 1, with the government takeover of Fannie Mae and Freddie Mac further complicating budget projections.

The fiscal 2008 budget deficit will rise to 2.9% of gross domestic product this year, according to the agency, up from 1.2% of GDP in 2007. The fiscal 2007 deficit was $161 billion.

"The budget deficit has risen substantially over the past year," Mr. Orszag said. "And according to CBO's updated economic forecast, the economy is likely to experience at least several more months of weakness."

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