CBO pegs '06 deficit at $368 billion-Projections omit big-ticket items

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CBO pegs '06 deficit at $368 billion

Projections omit some expected big-ticket items

WASHINGTON (MarketWatch) - The Congressional Budget Office on Tuesday slightly hiked its fiscal 2005 deficit projection and slashed its long-term deficit outlook. The revised figures, however, don't account for President Bush's upcoming request for additional funds for military operations in the Middle East or plans to overhaul Social Security.

The CBO, which is Congress' nonpartisan budget scorekeeper, forecast the fiscal 2005 federal budget deficit at $368 billion, up from its September forecast of $348 billion. Fiscal 2005 began Oct. 1.

The agency forecast the deficit to decline to $295 billion in fiscal 2006 and to fall further in subsequent years, turning to a surplus in 2012.

CBO noted, however, that the law governing its projections requires its estimates to be based solely on spending and revenue measures already on the books.

The report's estimates "omit a significant amount of spending that will occur this year - and conceivably for some time in the future - for U.S. military operations in Iraq and Afghanistan and for other efforts in the war on terrorism," the CBO said.

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