The US leader's budget for 2004 will plunge the coffers into an unprecedented deficit of 521 billion dollars, the source said on condition of anonymity.

The expected budget gap, if confirmed when Bush submits the plan to Congress, would leave his administration awash with red ink before the November presidential elections.

Bush's administration will foresee an improvement in the fiscal 2005 budget, which starts October this year, with a lighter deficit of less than 400 billion dollars, the source said.

He will also restate a pledge to halve the deficit in five years.

"The president is going to submit a budget on Monday that will continue to grow the economy, fund our national priorities like winning the war on terrorism, protect the homeland and other key priorites," said Office of Management and Budget spokesman Chad Kolton.

But it also would keep "overall spending under control so that we can cut the deficit in half within five years," he said.

Nevertheless, the US leader has presided over a stunning turnaround since inheriting a fiscal 2000 surplus of 237 billion dollars.

"It is a signal that this administration does not care about fiscal responsibilty," said the conservative Cato Institute's fiscal policy analyst, Veronique de Rugy.

"We are just going to see more spending in spite of all the rhetoric of the Bush administration."

The shortfall is already providing ammunition for Democratic opponents before the elections.

"At some point the American people will have to cut up George Bush's credit card," former Vermont governor Howard Dean, a Democratic contender for the right to challenge Bush in November, said this week.