The Congressional Budget Office yesterday forecast a $407 billion deficit for fiscal 2008, vastly larger than the $161 billion shortage in the prior fiscal year.

The deficit will peak at $438 billion in 2009, dipping to $431 billion in 2010 before declining to $325 billion in 2011 and $126 billion in 2012, according to the CBO, if current laws and policies remain in place.

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