WASHINGTON (Reuters) - The White House said on Thursday deficit spending in the 2006 budget would soar above $400 billion, well over a July forecast, and the election-year jolt was blamed largely on Hurricane Katrina costs.
The new deficit projection was likely to further intensify a debate leading up to mid-term elections in November on whether to renew President George W. Bush's tax cuts that he says are essential for economic growth but which Democrats say are a drain on the budget.
The deputy director of the White House Office of Management and Budget, Joel Kaplan, said White House officials believed that by sticking to Bush's economic policies and spending restraint "we will return to our downward trajectory and remain on (a) path to cut the deficit in half by 2009." [Read more - abcNews]
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