The Congressional Budget Office (CBO) released their deficit prediction today for fiscal year 2004, which ends September 30. The total number, $422 billion, will be a new all-time dollar record (not adjusted for inflation) but is $56 billion lower than the CBO predicted in January, thanks to better than expected revenue collection.

Although the figure is better than predicted earlier, the long-term deficit and debt predictions have worsened in the intervening months. The CBO now predicts in the next decade that the debt may climb by $2.3 trillion. This number is still low though, as the CBO is required by law to predict the administration's tax cuts will be phased out completely when they expire, and that the alternative minimum tax (AMT) will continue to generate large amounts of cash. Given the administration's push to renew the tax cuts and the large numbers of people who will begin to be affected by the AMT in the years ahead, it is unlikely revenue will be as high as the CBO is required to predict.

The full report is located here and is in .pdf format.

Yesterday, the World Trade Organization (WTO) authorized sanctions on the United States for failing to repeal an anti-dumping law. The "Byrd Amendment" authorized the government to reimburse manufacturers for losses sustained when foreign firms sell goods at below market values in the United States. These reimbursement are currently paid for by imposing duties on the foreign firms in question. The European Union (EU) argued successfully before the WTO in 2002 that the Byrd Amendment amounted to an illegal subsidy under WTO rules. Until today, however, the WTO had held off on imposing sanctions in response to the violation.

The sanctions are expected to cost around $144 million annually, but won't be imposed immediately as the EU is seeking to have the amendment removed by American lawmakers. This may be difficult, as the Byrd amendment has been supported in the past by a large majority of senators and representatives.

Both House Speaker Dennis Hastert (R-Illinois) and Senate Majority Leader Bill Frist (R-Tennessee) indicated on Sunday that they expect Congress to remain in session up to election day, November 2, in order to pass an intelligence reform package. Previously, Congress was set to adjourn October 1.