US budget deficit to reach $490 bn in 2009

July 29th, 2008 - 4:23 am ICT by IANS  

DPA
Washington, July 29 (DPA) The US’ budget deficit will climb to a record of nearly $490 billion in 2009, the White House said in a revised forecast Monday, blaming the rise on a slowing US economy. The figure of $482 billion for the fiscal year of 2009, which begins in October, is well above the $407 billion forecast made by President George W. Bush in February.

For 2008, the government deficit is projected at $389 billion, down from an earlier estimate of $410 billion.

Though the total 2009 figure is a record, the deficit is equivalent to 3.3 percent of the US economic output.

The figure is well below a record six percent deficit in 1983 and down from a high during the Bush administration of 3.6 percent of gross domestic product in 2004, according to the White House Office of Management and Budget.

White House spokeswoman Dana Perino defended the rising deficit as necessary to boost US economic growth, which slowed to one percent in the first quarter of 2008.

Congress passed a major economic stimulus package earlier this year and Saturday approved a housing rescue bill that could see the government guarantee up to $400 billion in home mortgages.

“We have worked very hard to try and keep spending in check,” Perino said. “But we also headed into an economic downturn.”

Opposition Democrats have sharply criticised a deficit they attribute to reckless spending under nearly eight years of the Bush administration.

“President Bush has mortgaged our future with record deficit spending on the wrong priorities,” said Nancy Pelosi, speaker of the Democratic-controlled House of Representatives.

Republican presidential candidate John McCain also called the figures a “sad legacy for the American taxpayer”, blaming unnecessary spending by Congress and the Bush administration.
DPA

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