US deficit to hit $455bn

THE White House said yesterday the federal budget deficit would balloon to a record $455 billion this fiscal year after absorbing heavy costs from the war in Iraq. It also said it would climb a further $20 billion in 2004, a presidential election year.

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.