George W. Bush rode into office with a budget surplus, courtesy of his predecessor. When he leaves in January, he will not return the favor. The White House estimated the budget deficit for next year at a record $482 billion — and that doesn’t include the full cost of two wars, the potential bailout of Fannie and Freddie, the full stimulus package or the loss of tax revenue from an economy in the toilet.

New York Times:

The outlook for the budget will crimp the ability of the next president to carry out ambitious spending plans of any kind.

Robert L. Bixby, executive director of the Concord Coalition, a nonpartisan fiscal policy group, said that a one-year record deficit would not necessarily be worrisome if not for the overall pessimistic economic atmosphere.

“I think that the fiscal year 2009 deficit could get a lot worse, if you add in war costs, there could well be a real drop-off in revenues from this year’s slowing economy and of course if there are further problems in the housing market, if the federal government does have to inject some money into Freddie and Fannie, that could get worse too,” Mr. Bixby said.

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