The US budget deficit is likely to be almost $1,000 billion (€796.6 billion) larger over the next decade than previously projected, according to the official congressional forecast released yesterday.
Economists said the estimates from the Congressional Budget Office (CBO), the non-partisan agency of Congress, suggested President George Bush would struggle to meet his administration's pledge to halve the deficit over the next five years.
The CBO said deficits from 2005-2014 would hit almost $1,900-$986 billion more than it forecast just six months ago. The projections underscore the dramatic deterioration in the US budget position under the Bush administration.
Democrats seized on the figures to step up their attacks on the White House.
Mr John Spratt, a Democratic member of the House budget committee, said the deficit was reaching alarming proportions.
"While Republicans suggest that these record-breaking deficits are 'manageable', there is growing awareness of the dangers these deficits pose to the economy," he said.
"Chronic deficits crowd out private investment, push up interest rates and slow down economic growth. The spectre of large and uncontrolled budget deficits could cause dramatic dislocations in financial markets."
Of the deterioration in the 10-year outlook since the CBO's previous forecasts last August, $681 billion is due to legislation enacted by Congress last year - including a $400 billion plan to add a prescription drug benefit to Medicare, the federal health programme for the elderly, and add to incentives for private insurers to participate in the programme.
The CBO is also assuming that lower inflation will eat into federal revenues and that even strong economic growth will produce more modest tax revenues than in the late 1990s. Analysts warned that the fiscal outlook could be even more gloomy than the CBO's headline forecast.
Under its rules, the CBO assumes that discretionary spending will rise by little more than the rate of inflation, falling as a share of gross domestic product. The CBO's analysis shows that, if other administration pledges were included, the deficits would be even larger. That in turn would defeat the administration's target of halving the deficit in the next five years.
Mr Bush has pledged that a series of tax cuts enacted by his administration, which had been due to expire, would be made permanent. His administration has also said that it would reform an obscure part of the tax code - the alternative minimum tax - to prevent it affecting middle-class taxpayers.
Many economists are sceptical the administration will be able to keep discretionary spending rises under control over coming years.
