"That's a $7 trillion turn," Mr. Conrad said. "What bothers me is that we are in the sweet spot of the economic cycle right now…"

U.S. Deficit Could Top $300 Billion
White House officials suggested today that the federal budget deficit could surpass $300 billion this year, setting a record as President Bush pushes plans for big tax cuts and new spending for the military and homeland security.

Mitchell E. Daniels Jr., director of the White House Office of Management and Budget, told the Reuters news service that the deficit could hit 3 percent of gross domestic product, which would put the deficit above $300 billion.

That is slightly higher than what Mr. Daniels and other administration officials have been hinting in recent weeks, but many outside economists say the actual deficits could turn out to be even higher, especially if the United States goes to war with Iraq.

By any measure, the government's financial situation continues to worsen by the week. Because of slow economic growth and declining stock prices over the last year, tax revenue fell sharply from October through December.

The Congressional Budget Office, the nonpartisan agency that makes its own estimates of fiscal trends, is expected to report on Wednesday that the deficit for 2003 will be at least $175 billion — but that is without any allowance for Mr. Bush's $674 billion, 10-year tax plan or the costs of a possible war.

Democrats on the House Budget Committee, after factoring in the cost of Mr. Bush's proposals as well as the latest data on revenue, predict that the deficit this year could hit $306 billion and that the government will run up $1.7 trillion in deficits by the end of 2011.

Administration officials and Republican lawmakers insist that the deficits are still small in relation to the size of the total economy. A deficit equal to 3 percent of gross domestic product would be twice as high as last year's figure, but it would still be a much smaller share of total economic output than the deficit of 1983 under President Reagan, which was 6 percent of gross domestic product.

Democratic lawmakers have stepped up their attacks on President Bush's tax-cutting plans. Senator Kent Conrad of North Dakota, the most senior Democrat on the Senate Budget Committee, noted that the government projected a 10-year surplus of $5.6 trillion just two years ago. Today, he said, the outlook is for a 10-year deficit of $1.5 trillion.
http://www.nytimes.com/2003/01/29/business/29BUDG.html