WASHINGTON (Reuters) - The U.S. budget gap expanded to $412.55 billion in fiscal 2004, marking the Bush administration's second-straight record deficit, the Treasury Department said on Thursday.

Though the final 2004 figure was the largest budget deficit in U.S. history, it was smaller than the White House's most recent forecast of a $445 billion shortfall given in July and well below the $521 billion it foresaw early this year.

The bipartisan Congressional Budget Office had expected a $415 billion gap in fiscal 2004, which ended Sept. 30.

Thursday's budget announcement came the day after the third and final debate before the Nov. 2 election, where President Bush and Sen. John Kerry squared off on domestic issues, including the budget.

Treasury also invoked stop-gap accounting measures on Thursday to avoid piercing the congressionally mandated $7.384 trillion debt ceiling, which needs to be raised for the third time in three years.

The government is just $4 billion below the legal borrowing limit as of Wednesday, according to the latest data.

Congress adjourned three days ago for an election break without raising the politically sensitive limit. They are expected to address the issue when they return on Nov. 16.

(From Reuters, excerpted).


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