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Smaller Surplus Projected

Congressional economists officially release new figures Tuesday sure to intensify the political battle over the U.S. federal budget. The Congressional Budget Office projects a slightly smaller surplus than the Bush administration for the current fiscal year and predicts the government will have to tap $9 billion in retirement fund reserves.

The White House is trying to downplay the difference over the surplus, saying that it amounts to less than one percent of the budget. But there are strong indications the Bush administration is worried about the new congressional budget numbers.

That is because the Congressional Budget Office predicts lagging revenues will force the government to dip into a retirement reserve fund in order to meet its bills. The fund, known as Social Security, is one of the most popular government programs.

When asked about the new congressional figures, White House Budget Director Mitch Daniels tried to put them in the best possible light. He said Congress should not cut spending on the President's priorities, such as defense and education, because it fears a slight reduction in Social Security reserves. "It would be, I think, a mistake to shortchange important national priorities perhaps only to find out later, that we did so needlessly," said Mr. Daniels.

But Democrats say the dwindling surplus has left Social Security vulnerable and the President's tax cuts are to blame.