Bush leaving nation drowning in red ink

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

"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.

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 fuelled by a home mortgage meltdown.

"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.

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."

"Every single person I’ve spoken to agrees with every major economist. There is going to be real significant investment, whether it’s 600 billion or more, or 700 billion, the clear notion is, it’s a number no one thought about a year ago," Biden said.

Fratto said that with just 29 days ahead of Obama’s inauguration on January 20, the Bush administration would not propose a second economic stimulus plan.

"I don’t think there’s any chance of a second stimulus package at the end of this administration in the days that we have remaining," he said.

"I know that the next administration and congressional leaders are discussing what they intend to do, and what their plans are, but it’s not something we’ll be doing," he said.

The economy is still in dire straits despite a 700-billion-dollar rescue plan signed by President George W. Bush.

Obama and his Democratic colleagues in Congress hope to have an economic stimulus package as big as 850 billion dollars ready when the White House changes hands next month, putting the economy at the top of the agenda.

The stimulus plan will be "the top priority in the first 100 days of the next Congress," which convenes in early January, House of Representatives majority leader Steny Hoyer said last week.