Washington (Sept. 9, 2004) -- While this year’s federal budget deficit will hit a record $422 billion, a whopping $2.3 trillion in new debt is projected to accumulate over the next decade, the Congressional Budget Office said.

The 10-year deficit could potentially reach $3.6 trillion if the Bush tax cuts are extended, the CBO noted. The cuts are currently set to expire in 2011. The deficit, which is roughly $56 billion less than was originally projected in March, still remains $46 billion ahead of last year, the CBO said.

The CBO expected that the federal debt held via the sale of Treasury bonds to finance overspending will spike 58 percent over the next decade to about $6.8 trillion by 2014.

Both parties seized on the CBO estimates to promote their candidates for the White House. The Republicans highlighted the $56 billion improvement over the CBO's earlier deficit estimate, while Democratic presidential candidate John Kerry quipped, "Only George W. Bush could celebrate over a record budget deficit of $422 billion."

-- WebCPA staff

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