WASHINGTON (AP) -- The White House budget chief is blaming the recession and the war against terrorism for the return of annual federal deficits, which he says he expects for at least the next three years.
Wednesday's bleak prediction by Mitchell Daniels was the first public acknowledgment by the Bush administration that after a string of four consecutive annual surpluses under President Clinton, deficits are back. Prior to the $69 billion surplus rung up in fiscal 1998, the last federal black ink had been in 1969.
"It is regrettably my conclusion that we are unlikely to return to balance in the federal accounts before possibly fiscal '05," Daniels said in a speech at the National Press Club. He added, "Things will have to break right for us to do that."
With a war under way and an ongoing danger of domestic terrorism, Americans are less concerned, at least for now, about budget deficits than they once were.
A reversion to the deficits that long dominated the capital's fiscal wars seems to present President Bush with a significant political liability that now seems likely to haunt him right up to his 2004 re-election campaign. And it augers a likely return to the annual partisan fights over where spending should be cut to balance the budget.
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