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Federal Deficit Reaches Record High

The White House expects a record-breaking federal deficit.
The federal budget deficit for fiscal 2009 is estimated to top a record-high of $482 billion, according to a Bush administration report released on Monday. The last highest deficit record was set in 2004, in the amount of $413 billion.

Earlier deficit projections for 2009, released in February, were estimated to be $407 billion. White House officials say that the Economic Stimulus Package is partly to blame for the higher-than-expected deficit. The two-year program, at a cost of $168 billion, was passed by Congress earlier this year as a boost to the slowing economy.

Deep troubles in the housing and financial markets restrict economic growth, despite the stimulus checks received by 130 million households. Consumers have cut back on discretionary spending as they try to balance soaring food and energy costs. The White House lowered its projected rate of economic growth to 1.6% for 2008 and 2.2% for 2009, down from earlier estimates of 2.7% and 3%.

Senate Majority Leader Harry Reid blames the deficit on the Bush administrations "misguided priorities." He says that Republics neglected to give attention to renewable energy, health care reform, and refocusing military efforts on Afghanistan.

House Budget Committee Chairman John Spratt D-S.C. said the deficit projection conifirms "the dismal legacy of the Bush administration: under its policies, the largest surpluses in history have been converted to the largest deficits in history."

The White House also expects inflation to rise at 3.8% for this year and then slow to 2.3% next year.
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Wednesday, 23 September 2020

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