Washington -- In a good news-bad news scenario, the Congressional Budget Office projected a budget deficit of $422 billion for fiscal year 2004 -- about $56 billion less than the agency had predicted in its March report -- but the highest in terms of dollars in U.S. history.

The CBO attributed the budget downsizing to higher-than-anticipated revenues. The office also pointed out that while the figure, 3.6 percent of the gross domestic product, represents an all-time high in terms of dollars, it would remain well below the peak budget deficit levels of the 1980s relative to the size of the economy.

The CBO said it would issue its revised 10-year projections Sept. 7. Over the first 10 months of the year, the government ran a deficit of roughly $392 billion, a rise of $68 billion over the prior period of last year.

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