Since Mr. Bush took office in January 2001, the federal debt has increased about 40 percent, or $2.1 trillion, to $7.4 trillion. Congress has raised the debt ceiling three times in three years, raising it most recently by $984 billion in May 2003.

On Thursday, Treasury Secretary John W. Snow said that the federal government was about to breach the limit again and would be able to keep operating only if it started tapping money intended for the civil service retirement fund, the pension system for federal workers.

"Given current projections, it is imperative that the Congress take action to increase the debt limit by mid-November,'' Mr. Snow warned in a statement, declaring that his arsenal of financial tools "will be exhausted'' at that point.

Fiscal Year 2004 ended on September 30, and today the Treasury Department reported that the deficit for 2004 was $413 billion, or 3.6 percent of Gross Domestic Product.

At 3.6 percent of GDP, the 2004 deficit marks the fourth consecutive year of fiscal deterioration, the first time this has happened since the U.S. entered World War II.

At 3.6 percent of GDP, the 2004 deficit is up from the 2003 level of 3.5 percent of GDP and is the highest level since 1993.

The deficit increased in 2004 even though the recession officially ended in November 2001. This is the first time since before the Depression of the 1930s that the deficit has continued to increase this far into a recovery.

At $413 billion, the 2004 deficit was $36 billion higher than the 2003 deficit, which stood at $377 billion. The growth of deficits has largely reflected stunning revenue declines.

Federal tax revenues this year are at their lowest level, measured as a share of the Gross Domestic Product, since 1959. In contrast, federal spending in 2004, measured as a share of GDP, is slightly below its average level of the last four decades.

¶ 10:28 PM