WASHINGTON, Feb 3: US President George W. Bush unveiled on Monday a budget built on cutting taxes, fighting terrorism and beefing up the military, resulting in record deficits for the next two years.

The budget outlined record deficits of $304 billion in fiscal 2003, which began October 1 last year, and another $307 billion in fiscal 2004.

“The budget for 2004 meets the challenges posed by three national priorities: winning the war against terrorism, securing the homeland and generating long-term economic growth,” Bush said in a message accompanying the budget proposals, which were sent to Congress.

“A recession and a war we did not choose have led to the return of deficits.” The budget forecast a 4.2 per cent increase in spending to $2.23 trillion in fiscal 2004 and a 4.7 per cent rise in receipts to $1.92 trillion.

The shortfall breaks the 1992 record deficit of $290 billion held by then-president George Bush.

Over the next five years, the cumulative budget deficit would amount to $1.08 trillion.

—AFP