Deficit hits record $413B; Democrats blame Bush

Republicans said the figure was an improvement from earlier projections.
WASHINGTON (AP) -- Democrats are blaming President Bush for the record 2004 federal deficit of $413 billion, but Republicans say the figure shows that the economic and budget pictures are brightening.
The Treasury Department announced the figure Thursday, two weeks after the government's 2004 budget year ended and just 19 days from an Election Day in which Bush's economic and fiscal performance are pivotal issues.
The number easily surpassed the previous record in dollar terms, the revised $377 billion shortfall of 2003. It was the highest deficit since World War II when inflation is factored out.
Republicans emphasized that the figure was an improvement from earlier deficit projections. At the beginning of this year, the White House projected a $521 billion shortfall for 2004 and the Congressional Budget Office forecast a gap of $477 billion, though both lowered their forecasts as the year progressed.
"While the deficit is unwelcome, if we stick with the president's plan of economic growth and spending discipline, we will continue to see improvement and we will cut the deficit by more than half in five years," said White House budget director Joshua Bolten.
Citing data pointing to economic improvements, Treasury Secretary John Snow said, "All of this shows that the president's tax relief initiatives are having the intended effects."
Four-year decline
Democrats said those arguments ignored the budget's dramatic four-year decline. Bush took office after a four-year string of federal surpluses, and the 2004 surplus of $387 billion that he forecast upon taking office became an actual deficit of $413 billion -- an $800 billion reversal.
"President Bush has never been straightforward that the deterioration in our deficit is not short term, but a dramatic long-term deterioration," said Gene Sperling, an economic adviser to Democratic presidential candidate Sen. John Kerry of Massachusetts.
"The American people deserve ... a president who doesn't try to mislead them about the true fiscal condition of the country, and they deserve a president who will put this country back on a course of fiscal responsibility," said Sen. Kent Conrad, D-N.D., a senior member of the Senate Budget Committee.
New procedures
The Treasury released the deficit figure the same day it announced the government has begun using accounting procedures to avoid hitting the $7.4 trillion statutory national debt limit.
Eager to avoid a fight that would let Democrats call attention to the government's red ink, Republican leaders have put off consideration of legislation to boost the government's borrowing authority until after the elections.