President Bush, in proposing a fiscal 2009 budget with a near-record deficit, insisted the government will run a surplus by 2012. But that outlook is based on scenarios considered unlikely by budget experts, congressional Democrats and even some Republicans.

War spending would have to drop to a fraction of its current level. Congress would have to make steep cuts in a raft of domestic programs, while cracking down on the growth of Medicare and Medicaid. And the economy, now slowing sharply, would have to rebound quickly to...