White House acknowledges leaving massive deficit

Washington: US President George W Bush's administration acknowledged on Monday that it would leave behind a massive budget deficit but could not say whether it would exceed one trillion dollars.

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“The size of the budget deficit, whatever the number is, I can't predict whether it's going to be a trillion or something less than that,'' said White House spokesman Tony Fratto. Fratto said it would be a **very significant number.'' He was commenting on a warning by vice president-elect Joseph Biden at the weekend that the incoming administration of Barack Obama could inherit a deficit exceeding a trillion dollars, the largest in US history.

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The deficit hit $455 billion for the fiscal year that ended September 2008. Fratto said that the burgeoning deficit stemmed from recession caused by financial turmoil fueled by a home mortage meltdown.

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“And I think it's going to reflect two things. One is the downturn in the economy and the slowing of receipts coming into the federal government. It's also going to reflect the large increase in spending over the short term to deal with the financial crisis,'' Fratto said.

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Biden, in his first interview since the November 4 election, told ABC television that the US economy was in “much worse shape'' than he thought and needed a second stimulus package to prevent it from tanking. He called for a second big stimulus package to keep the world's biggest economy from “absolutely tanking.''