Washington ? This year’s federal deficit will soar to $199 billion even without President Bush’s new tax cut plan or war against Iraq, the Congressional Budget Office said Wednesday in a report that cast doubt on chances for balancing the budget anytime soon.

The nonpartisan budget office projected that without action on any tax or spending initiatives — which no one considers realistic — small annual surpluses would not return until 2007, a year later than the office predicted in August.

In perhaps the starkest depiction of how rapidly the government’s long-range outlook has eroded, the budget office said Wednesday that it now envisioned a cumulative $20 billion surplus over the decade that began last year. In May 2001, the office had projected an unprecedented $5.6 trillion surplus for that same period.

The bleak forecast further inflamed this year’s budget fight between Bush and congressional Democrats, who accuse each other of speeding the downward spiral of the government’s books. Bush wants more tax cuts and spending restraint, while Democrats prefer higher spending and smaller tax reductions.

“The elephant in the room he didn’t mention last night was the deficit,” said Rep. John Spratt of South Carolina, top Democrat on the House Budget Committee, referring to the president’s State of the Union address. “The question he avoided was: How would he do all the things he’s talking about in the State of the Union and have any kind of bottom line left in the budget?”

In his speech, Bush renewed his call for a $674 billion, 10-year tax-cutting plan to fortify the economy, and proposed spending initiatives including a $400 billion, 10-year expansion of Medicare. He said the best way to control deficits was to foster economic growth and limit federal spending.

Republicans echoed his argument Wednesday. They added that for now, deficits would have to play second fiddle to initiatives aimed at invigorating the economy and confronting terrorism.

“If the only index you look at is cash flow, you may be missing the point” that there are other important priorities, said House Budget Committee Chairman Jim Nussle, R-Iowa.

The budget office’s projected $199 billion deficit for this year compared with a $145 billion shortfall it projected in August. Its forecast five months ago for a $111 billion deficit in 2004 also got worse, rising to $145 billion in the new report.

Since CBO’s projections include none of the tax and spending initiatives that lawmakers are likely to tackle, they are meant as a benchmark for measuring future action.

As a result, actual shortfalls are almost certain to be worse. Private economists have said this year’s deficit will likely exceed $300 billion — surpassing the record $290 billion shortfall of 1992, when Bush’s father was president.

Bush releases his 2004 budget Monday, and it will forecast larger deficits than CBO’s because it will include the costs of the president’s tax and spending plans. White House budget chief Mitchell Daniels said in an interview Tuesday that it will predict a deficit for this year of close to $300 billion — without a war.