Washington -- The proposed tax cuts as part of President Bush’s $2.4 trillion budget would most likely have a minimal effect on the economy, according to a report prepared by the Congressional Budget Office.

In its annual examination of the president's budget, the CBO -- a nonpartisan agency that provides fiscal analysis for lawmakers -- maintained that Bush's proposals could either increase or reduce economic output through 2009, and improve it in the following five years. "However, the differences are likely to be small, affecting output by less than one-half of one percentage point on average," the study said.

According to CBO estimates, the deficit under Bush’s budget proposals would be $478 billion in fiscal 2004 and $358 billion in 2005. As a share of the total economy, the deficit would total 4.2 percent of gross domestic product this year, then fall to 3.0 percent next year.

The President has urged lawmakers to make his earlier $1.7 trillion in tax cuts -- all of which would sunset by 2011 -- permanent. However, record budget deficits in an election year have stalled efforts to extend the tax cuts.

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