Inflation may be a non-factor in the U.S. economy, but it appears to be a nasty problem for the Bush budget team. As the Associated Press reported Thursday evening: "President Bush's new budget projects the Medicare overhaul he just signed will be one-third more costly than estimated and this year's federal deficit will surge past a half trillion dollars for the first time, administration and congressional officials said Thursday."
The latest run-up in the numbers is not likely to please the growing faction of fiscal conservatives -- many of them Republicans -- who are railing against the president's budget-busting ways. And while Bush signaled in his State of the Union address that the 2004 election will largely be fought and won on the issue of national security, the Democratic presidential candidates may get some traction yet on the decidedly murky economic front. It could eventually get difficult for Washington to finance a perpetual global war against terrorism with a half trillion, or more, in Federal red ink.