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CENTRAL ARIZONA COLLEGE
DIRECTOR OF HEALTH INFORMATION MANAGEMENT Trades/Construction
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MAINTANANCE POSITION Administrative & Professional
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CEO/President Sales and Marketing
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Counselor

WASHINGTON — The federal deficit this year will be less than previously forecast but will total $1.76 trillion over the next decade, and could be double that estimate if President Bush's tax cuts are made permanent, the Congressional Budget Office said Thursday.

The $260 billion deficit forecast for the current budget year, which ends Sept. 30, is $112 billion below the office's last estimate, in March.

The bulk of the improvement came from a flood of tax revenues this year, reflecting a rebounding economy and healthy corporate profits.

But the CBO forecast the improvement as short-lived, projecting the gap between revenues and spending will rise to $286 billion in 2007 and total $1.76 trillion over the next decade.

The deficit picture, according to the CBO, would be even worse if Bush succeeds with a top domestic priority, persuading Congress to make permanent the tax cuts of his first term. They are scheduled to expire at the end of 2010.

Extending the cuts through 2016 would add $2.2 trillion to the deficit, the CBO said. The cost would climb to $3.26 trillion if a permanent fix is made to the alternative minimum tax, which is designed for the wealthy but is ensnaring more middle-income taxpayers.

Those increases would be partially offset, the CBO said, if different assumptions were made about extra spending to cover the wars in Iraq and Af-ghanistan. Under congressional rules, the CBO had to assume that this year's war spending and support for victims of Hurricane Katrina would continue indefinitely.

Combining lower spending for the war and the extension of the tax relief would produce a deficit of $3.5 trillion from 2007 through 2016, using the CBO's assumptions.

The administration said Bush is committed to fulfilling his 2004 campaign pledge of cutting the budget deficit in half by 2009, the year he leaves office.