U.S. Economy

WASHINGTON — The White House has increased its estimate for next year's deficit to nearly $490 billion, a record figure that will saddle the next president with deepening budget problems in his first year in office, a report due out Monday shows. The projected deficit for the fiscal year that begins Oct. 1 is being driven higher by the continuing economic slowdown and larger-than-anticipated costs of the two-year, $168 billion fiscal stimulus package passed by Congress, said two senior administration officials with direct knowledge of the report. In February, President Bush predicted the 2009 deficit would be $407 billion. The rising deficit for 2009 marks a sharp turnaround for Bush's fiscal legacy. He inherited a $128 billion surplus when he came into office in 2001. It soon turned to red ink because of a recession, the Sept. 11 attacks and the war on terrorism.

WASHINGTON (Reuters) — The number of miles driven on U.S. highways in May fell a record 3.7%, or 9.6 billion, from last year because of soaring fuel costs, the U.S. Transportation Department said Monday. It was the biggest drop ever for any May, which usually sees increased traffic due to Memorial Day vacations and the beginning of summer. "This continues a seven-month trend that amounts to 40.5 billion fewer miles traveled between November 2007 and May 2008 than the same period a year before," the department said.

USA TODAY: Fuel and energy costs are rising so quickly for the USA's public school districts that nearly one in seven is considering cutting back to four-day weeks this fall. One in four is considering limits on athletics and other extracurricular activities, and nearly one in three is eliminating teaching jobs. In the first detailed look at how fuel costs are affecting schools, a survey by the American Association of School Administrators (AASA) finds 99% of superintendents contacted say they're feeling the pinch — and 77% say they're not getting any help from their state. The AASA survey of 546 superintendents, out today, follows an informal poll last month that found fuel and heating costs rising from 10% to 32% over last year. Other surveys have found that transportation costs are up by as much as 40% in the nation's 14,100 school districts. The new figures paint a vivid picture, finding that:

• 15% of districts are eliminating bus routes and either eliminating or modifying extracurricular offerings or sports.

• 15% are considering moving to a four-day school week.

• 44% are cutting back on field trips.

• 29% are eliminating or modifying teaching positions.

WASHINGTON — More than 1.6 million businesses owe the federal government in excess of $58 billion in delinquent payroll taxes, interest and penalties, including money withheld from employees' salaries, a congressional report says. The numbers haven't changed much in a decade despite Internal Revenue Service enforcement, the Government Accountability Office found. In 1998, about 1.8 million businesses owed about $49 billion. Today, however, more debts are longstanding. Nearly 15,000 employers owe at least five years' worth of taxes, and nearly 500 owe for 10 years, the study says. "Paying taxes isn't an option for hardworking Americans, yet these businesses act like they are exempt from this basic civic responsibility," Sen. Norm Coleman, R-Minn., who sought the study, said in a statement. The lost payroll taxes are part of a much larger "tax gap" that each year costs the government more than $400 billion in unpaid taxes. An IRS report found that the tax gap was $345 billion in 2001 alone.