Report: Deficit to top $420-billion

WASHINGTON - The White House will project soon that this year's federal deficit will exceed $420-billion, congressional aides said Tuesday, a record figure certain to ignite partisan warfare over President Bush's handling of the economy.

The annual summertime analysis is expected Friday, the Associated Press reported, citing several unnamed congressional aides. That would be well after the frequently ignored legal deadline of July 15.

White House budget office spokesman Chad Kolton said the report will be issued when it is ready, and offered no date. Friday will be a day after the Democratic National Convention ends - a release date that would prevent presidential candidate John Kerry, D-Mass., and others at the gathering from citing its figures to criticize Bush.

The White House was ready to emphasize that the figure is well below the $521-billion it projected for this year in February, and tie it to economic improvements.

"It is hard to disregard the strong progress made on the economy and our fiscal situation," Kolton said Tuesday.

Democrats have said Bush purposely overestimated this year's budget gap so he could take credit for improvement when the real figures came in.

"The new estimate ... will set a new record of fiscal mismanagement and deficit spending," said Kerry economic adviser Gene Sperling.

The federal budget year runs through Sept. 30 and has only two months to go.

Last year's deficit was $375-billion, the worst ever in dollar terms. The White House has said the numbers are manageable because they equal only about 4 percent of the U.S. economy - well below the 6 percent reached under President Ronald Reagan.

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