trillion deficit is in the forecast
G. Gosselin Los Angeles Times: Jan.
Federal budget deficits
are expected to total $2.4 trillion
over the coming decade, the Congressional Budget Office said Monday,
almost $1 trillion more than the agency estimated only six months
Congress heeds President Bush's call and makes the tax cuts of the
past three years permanent, that total could jump to more than $5
trillion, according to CBO figures, a development that would make it
extremely difficult for Bush to keep his pledge to cut the deficit in
half by the end of a second term.
two thirds of the extra $1 trillion in red ink is the result of
recently passed legislation, especially the new Medicare prescription
drug measure. Most of the rest is due to changes in the
economic outlook, including a reduction in its inflation estimate
that, paradoxically, would cause future government revenues to
congressional agency's new deficit estimate, an annual event, comes
as Bush prepares to unveil his election year budget and seems
certain to add fuel to an already heated presidential campaign issue.
Among the figures Bush critics are likely to zero in on: Federal
revenues as a fraction of the country's gross domestic product have
fallen to levels not seen since Harry Truman was president.
believe that measuring almost every element of the budget, including
deficits, against GDP offers the best gauge of their size because it
puts costs against some indication of the nation's ability to pay.
Critics say the decline in revenues as a fraction of GDP shows that
the president's tax cuts are starving the government of funds. Democrats
'are already using the deficit to contrast Bush's economic and budget
record with that of President Clinton, who managed a string of budget
surpluses during his final years: in office, the first in nearly
three decades. But deficits are not simply a
party versus party
issue; they create fissures in both parties between "hawks"
who fear that federal overspending could cause substantial economic
damage and those who think the problem is overblown.
nation's fiscal outlook is deteriorating," said Robert L. Bixby,
executive director of the Concord Coalition, a bipartisan budget
watchdog organization in Arlington, Va. "The
politically unappealing reality staring at those on Capitol Hill is
that it will take a significant slowing of spending growth or new
revenues or, most likely, both to return the budget to balance,"
added Maya MacGuineas, executive director of the Committee for a
Responsible Federal Budget, a similar group.
Congress’ non-partisan fiscal analyst, predicted that the
deficit for the 2004 fiscal year, which runs through Sept. 30, would
hit $477 billion a record in dollar terms and substantially
higher than last year's $375 billion shortfall. But at 4.2 percent of
GDP, it is still below the gargantuan deficits of the 1980s. The new
projection was similar to the agency's estimate of last August
this year, the agency predicted, deficits will begin shrinking
to $362 billion in fiscal 2005, $269 billion in 2006 and so forth
until the end of the decade, then drop precipitously and' actually
show a nearly $13 billion surplus by 2014.
agency officials readily acknowledged that their projections were
based on a number of heroic assumptions, chief among them that
Congress and the president add not a single spending program or
approve any more tax cuts.