Some said it couldn't be done. Others doubted his resolve. But it looks as though President George Bush has broken his own record this week - the largest budget deficit on record. Woohoo! The Congressional Budget Office (CBO) has released new estimates on the federal budget deficit for FY 2008 - which they believe will come in at an incredible $438 billion, or 3.1 percent of GDP. This shatters Bush's previous record set in 2004 of $413 billion.

CBO Director Peter Orszag blogged about the estimates yesterday:

CBO released its Monthly Budget Review today. Based on data from the Daily Treasury Statements, CBO estimates that the federal budget deficit was about $438 billion in fiscal year 2008, $276 billion more than the shortfall recorded in 2007. (The Treasury Department will report the actual deficit for fiscal year 2008 later this month.)

Relative to the size of the economy, that deficit was equal to 3.1 percent of gross domestic product, up from 1.2 percent in 2007. (The average deficit over the preceding five years, 2002-2006, was 2.6 percent of GDP.) The $438 billion figure is about $31 billion more than the $407 billion deficit CBO projected this summer, primarily because revenues are lower than we anticipated and spending for defense and deposit insurance is turning out to be higher.

An Associated Press article published today rips into President Bush and his administration's fiscal record, noting "virtually every administration promise on the deficit has failed to come to pass," and "a later promise to cut the deficit in half by the time Bush leaves office is in tatters, and virtually no one takes seriously his proposed path to a balanced budget by 2012." Ouch!

Related Resources:
AP Story: U.S. Budget Deficit Hits Record $438 Billion For Year
CBO Blog: Monthly budget review: FY 2008 deficit of $438 billion
Statement of Senate Budget Committee Chair Kent Conrad (D-ND)