WASHINGTON -- The federal deficit will dip below $400 billion -- slightly better than recent forecasts but still an unprecedented figure -- for the fiscal year just ended, top White House and congressional budget officials said yesterday.
Administration and congressional budget officials suggested the shortfall could be in the $380 billion range for fiscal 2003, which ran through Sept. 30. Final data isn't expected until later this month.
The improved outlook for 2003 still leaves the red ink surpassing the $290 billion record set in 1992. Analysts also see the government still staring at a gloomy budget horizon into the future, with huge shortfalls projected indefinitely.
"If you lost a game 9-0, is that better than 10-0?" said Robert Reischauer, a former head of the Congressional Budget Office who is now president of the Urban Institute.
In July, the White House said it expected the 2003 deficit to hit $455 billion. The next month, the nonpartisan Congressional Budget Office projected a 2003 shortfall of $401 billion.
But yesterday, White House budget director Joshua Bolten told reporters, "The fiscal year '03 deficit will be comfortably under $400 billion." Bolten provided no specific figures, and would only ascribe the improvement to higher revenue collections and lower spending than expected.
Trent Duffy, spokesman for the White House budget office, cited a report issued recently by UBS Warburg, an investment bank, projecting a 2003 deficit of about $380 billion. Duffy called that figure "very similar to what we're seeing in the data."
Duffy said President Bush still plans to cut deficits in half in five years by trying to restrain spending and spark the economy.
"No one in the administration is celebrating this," Duffy said of the lower figure.
Separately, the director of the Congressional Budget Office said in an interview that his agency sees the past year's shortfall "moving toward $380 billion."
The director, Douglas Holtz-Eakin, said preliminary figures were showing lower than expected spending for Medicaid, defense, and other programs "across the board, little nips and tucks."
He also cited better-than-anticipated collection of many types of federal revenue. But he cautioned that his agency did not believe it was witnessing a sea change in the budget outlook. The budget office has projected a $480 billion deficit for 2004.