A senior administration official said Monday the federal budget deficit for this year will set a record high approaching $490 billion.
The official said the deficit was being driven to record levels by the sagging economy and the stimulus payments being made to 130 million households in an effort to keep the country from falling into a deep recession. A deficit approaching $490 billion would easily surpass the record deficit of $413 billion set in 2004.
The administration official spoke on condition of anonymity because the new estimate had not been formally released. Administration officials were scheduled to do that at a news conference later Monday.
White House budget director Jim Nussle and Edward Lazear, chairman of the president's Council of Economic Advisors, were scheduled to release the administration's updated forecasts at an early afternoon news conference.
When President Bush sent his new budget to Congress in February, he projected that the deficit for the current budget year, which ends Sept. 30, would total $410 billion.
The deficit for 2007 totaled $161.5 billion, which represented the lowest amount of red ink since an imbalance of $159 billion in 2002. The 2002 performance marked the first budget deficit after four consecutive years of budget surpluses.
That stretch of budget surpluses represented a period when the country's finances had been bolstered by a 10-year period of uninterrupted economic growth, the longest period of expansion in U.S. history.
However, the country fell into a recession in March 2001 and government spending to fight the war on terrorism contributed to pushing the deficit to a record in dollar terms in 2004.