White House slashes 2005 U.S. budget gap forecast

WASHINGTON (Reuters) – The White House on Wednesday slashed
its forecast for the fiscal 2005 budget deficit by nearly $100
billion after the government raked in unexpectedly large tax
revenues in recent months.

The Bush administration projected a deficit of $333 billion
for the fiscal year ending Sept. 30, according to the Office of
Management and Budget’s “midsession” update.

The revised budget gap was sharply narrower than the $427
billion estimate the Bush administration gave in February with
the release of its proposed budget. It was also down from
2004′s deficit of $412 billion, which was a record high.

Private analysts had projected a lower deficit, but some
cautioned that temporary factors, such as capital gains
receipts from the jump in stock prices late last year, were at
play in the improvement.

They also warned that spending on entitlement programs such
as the Medicare health program for seniors is expected to climb
steeply in coming years.