The U.S. budget deficit is projected to reach $368-billion this year, the third-biggest shortfall in U.S. history.
The deficit could go even higher once Congress approves more money for military operations in Iraq and Afghanistan.
The projection released Tuesday by the U.S. Congressional Budget Office did not take spending for the two war zones into account.
The CBO said rules that govern its projections force it to omit "a significant amount of spending" related to the U.S.-led war on terror. The CBO also warned that these rules may affect its figures that show the U.S. deficit falling over the next seven years, and then turning into a surplus.
Asked about the report, a White House spokesman said President Bush's plan to cut the deficit "is on track."