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The Bush administration has known for months that its required midsummer re-estimates for the federal budget outlook would include so vast a collection of zeros and minus signs that officials started practicing the talking points last spring.

Before he floored the gas pedal on his way out of Washington last month to run for governor in Indiana, Mitchell E. Daniels Jr., the departing Office of Management and Budget director, acknowledged that this year's red ink would climb above $400 billion. This week's newest estimate - left to Daniels's successor, Joshua Bolten - is actually $455 billion. And in fiscal 2004, that red sea is expected to rise to $475 billion. The administration declared the deficits "manageable" and nearly harmless to the economy, as measured by the effect on historically low interest rates.

In June, the unemployment rate rose to 6.4 percent, and Federal Reserve Chairman Alan Greenspan told Congress on July 15 that the central bank is worried enough about economic performance to keep short-term interest rates low for as long as it takes. The confirmation that deficits are expected to be around throughout a Bush second term, if he wins one, was greeted as further bad news. This week the president's renewed fealty to fiscal discipline erupted as pledges to curb federal spending and to slash the deficit in half by 2006. That would place a minus sign in front of $238 billion instead of $475 billion.

Deficits alone will not bury a Bush policy agenda, or defeat him at the polls, but some analysts believe they make life infinitely harder. The president wants to send troops, money, and materiel to Iraq for "as long as it takes." It's an expensive endeavor, running about $100 billion so far and at least $4 billion a month - and that's without the tab for hot-wiring a new Iraqi government. The president's latest budget calculus doesn't include the bill for Iraq.

Bush would like to permanently enact the tax-cut provisions he has backed since 2001, but on paper they vacuum revenues out of the Treasury, making the fiscal picture appear even more wan. At the same time that Greenspan encouraged Congress to reprise the budget discipline of the old pay-as-you-go rules that roughly matched revenues and outlays, House and Senate conferees were arm-wrestling over the best way to add an expensive prescription drug benefit to Medicare, which itself is getting costlier by the day.

The president, in a second term, would like to add private investment accounts (to be invested in the financial markets) as an improvement over traditional Social Security for younger workers. But perhaps a trillion dollars in government spending would be needed over time to transition from the current system to a new one -- a price tag difficult to imagine with at least $1.5 trillion in deficits already tallied between 2004 and 2008 (OMB quit using 10-year estimates because it said they were unreliable, so no one in the administration is paying attention to out-year projections that could be even worse.)

"I don't think there's anything in [the OMB report] that could be regarded as a silver lining," said Urban Institute President Robert Reischauer, who once served as the top budget analyst for Congress. "Cutting spending is never a crowd pleaser, and it's usually avoided in an election year. This puts [Bush] in a very difficult spot," he said. "And the deficit numbers will be sufficiently bad that the taste for further tax cuts will disappear. I think there will be considerable hesitation in Congress," Reischauer added.

In a preview of the battle that Democrats are itching to join, House Democratic Whip Steny Hoyer of Maryland wasted no time as the OMB midsession review was released. In a seam-splitting leap, he blamed higher property taxes, telephone and electricity taxes, and reductions in state and local programs on President Bush and the Republican-controlled Congress, who, Hoyer said in a press release, are "charging billions to the nation's credit card and slipping the bill into your pocket."

A wobbly economy, a halting rebuilding effort and continued casualties in Iraq, and questions about the administration's credibility in the run-up to war could eventually tug Bush's job-approval polling numbers out of the clouds. But that has not yet happened: The Gallup Organization measured Bush's overall job-approval rating at 62 percent in its poll taken from July 7 to 9.

"It's fairly remarkable that Bush's job-approval rating remains so high in the midst of what Americans continue to perceive is a poor economy," Gallup Editor-in-Chief Frank Newport reported this week. "More than four in 10 Americans - 44 percent - mentioned some aspect of the economy as the nation's most important problem.... Bush's approval rating on the economy is now at 48 percent, roughly where it has been all year."

Larger deficits could turn out to be a plus for Bush's agenda in one way, noted Barry Anderson, former acting director of the Congressional Budget Office and a senior career budget official at OMB in several administrations. Bush, increasingly tarred as a big spender, could argue if he wins a second term that deficits require cuts in nondefense discretionary outlays. "If the president's goal with his tax cuts was really about reducing the size of government, then this budget picture is setting the stage, come a second term, for cutting nonpriority spending," Anderson suggested. "It makes it easier to do things he hasn't done yet."