But the White House said the deficit would improve, pledging for the first time to cut it in half by 2006, though officials did not spell out how they would do so.
Democrats accused US President George W Bush of using rosy economic assumptions to understate the magnitude of a budget gap approaching the half-trillion-dollar mark for the first time.
"President Bush is repeating two dangerous habits: misleading the American people and ducking responsibility for his mistakes," said Democratic presidential hopeful Joseph Lieberman, a senator from Connecticut.
The White House countered that the 2003 and 2004 budget deficits 50% higher than the administration's own forecasts five months ago were "manageable" and reflected economic and national security priorities following the September 11, 2001, attacks.
The new projections include initial costs from the war in Iraq, as well as Mr Bush's sweeping tax cuts.
"The deficit certainly remains a concern, but it is one that is manageable and it is one that we are addressing," White House spokesman Scott McClellan said.
He said the administration would press congress to hold the line on spending and expected the economy to grow "stronger in the coming year".
According to administration projections, budget deficits would narrow to $238 billion in fiscal 2006 and to $226 billion in 2008.
Military operations in Iraq and Afghanistan have cost roughly $4.8 billion a month $58 billion on an annual basis which is well over initial estimates.
These war costs, plus the weaker than expected economy and the tax cuts, forced the White House to revise its budget forecasts from February, when it expected a deficit of $304 billion for the current fiscal year and $307 billion next year.
Underscoring the sharp reversal in the US fiscal position, White House and congressional analysts had as recently as 2001 predicted 10-year budget surpluses of up to $5.6 trillion. Many analysts now expect massive deficits through 2013.
Rising deficits have yet to become a major political issue outside Washington, but some analysts believe that will change if they keep climbing ahead of the 2004 presidential election.
But the White House sought to put the best possible face on the bleak budget news.
At $455 billion, the new deficit would eclipse the previous record of $290 billion in 1992, when Mr Bush's father was president.
The US government enjoyed four straight years of budget surpluses between 1998 and 2001.
Democrats and some analysts say that when revenue from Social Security is set aside, the actual deficit could approach $600 billion, or 5.5% of gross domestic product, one of the highest since World War II.