Citing the fact that President Bush's recently unveiled $2.57 trillion budget relies heavily on cuts spanning just a fraction of government programs, the Congressional Budget Office said as a result, trimming the record deficit would be a "difficult exercise." The president recently sent Congress his fiscal 2006 budget, which proposes widespread cuts in domestic spending -- including eliminating or reducing 150 underperforming programs. The new budget also raises spending levels for defense and homeland security programs. "Discretionary spending as whole is a third of the budget. You take off half of that in defense and some more in homeland and you're looking at a small fraction of the budget as the lever by which you try to bring things to a balance," said CBO director Douglas Holtz-Eakin. "That's a very difficult exercise." The CBO's deficit forecast for fiscal 2006 is $295 billion, which excludes the costs associated with the conflicts in Iraq and Afghanistan. Meanwhile, The White House has projected a third consecutive shortfall of $427 billion this year, a figure that includes the war costs.

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