The long-term outlook for the US budget deficit has deteriorated since the end of last year, according to the nonpartisan Congressional Budget Office, which yesterday published figures suggesting the administration may struggle to meet its promise to halve the shortfall over George W. Bush's second term.

Excluding the costs of the war on terror, the projected 10-year deficit has increased by $500bn to $1,364bn, largely because of the decision to extend the child tax credit.