The US government's budget deficit will surge past a half-trillion dollars next year, according to gloomy new estimates, a record flood of red ink that promises to force the winner of the presidential race to dramatically alter his economic agenda.
US House Budget Committee Chairman Rep. John Spratt Jr., (left) looks on as Senate Budget Committee Chairman Sen. Kent Conrad gestures during a news conference on Capitol Hill in Washington, Monday, July 28, 2008, to discuss the budget deficit. [Agencies]
The deficit will hit $482 billion in the 2009 budget year that will be inherited by Democrat Barack Obama or Republican John McCain, the White House estimated Monday. That figure is sure to rise after adding the tens of billions of dollars in additional Iraq war funding it doesn't include, and the total could be higher yet if the economy fails to recover as the administration predicts.
The result: the biggest deficit ever in terms of dollars, though several were higher in the 1980s and early 1990s as a percentage of the overall US economy.
Neither campaign is backing off campaign promises -- McCain to cut taxes and Obama to expand health and education programs -- in light of the bleaker new figures.
"We can't afford not to invest in some major initiatives such as health and energy and more tax cuts," said Obama economic adviser Jason Furman.
But Democrats controlling Congress suggest that may have to change once US President Bush's successor takes office.
"Whoever becomes the next president will have a very, very sobering first week in office," said Senate Budget Committee Chairman Kent Conrad, D-N.D.
