CBO Says Bush Budget Worsens Long-Term Deficit
CBO Says Bush Budget Worsens Long-Term Deficit
Fri Mar 4, 2005 3:59 PM ET
WASHINGTON (Reuters) - The longer-term deficit outlook will worsen under President Bush's new budget plan, but this year's deficit will be less than White House projections, Congress' fiscal watchdog said on Friday.
This year's deficit under the Bush plan will be about $394 billion, slightly lower than the record $427 billion the White House had forecast, the Congressional Budget Office said in a preliminary assessment.
The CBO report also showed Bush should be able to reach his target of halving the deficit in five years from a starting point of $521 billion. Critics say that figure was inflated.
But the CBO added that over the longer term, the deficit would soar to a cumulative $2.6 trillion over 10 years under the Bush plan, compared with the $980 billion shortfall the CBO had forecast without the proposal.
"Over the 2006-2015 period, the president's proposals would increase the total deficit by an estimated $1.6 trillion," CBO said.
Bush's plan to extend certain tax cuts is the main reason for a loss of $1.4 trillion in revenues under his budget plan, the CBO said.
The agency had also been expecting the deficit to turn to a small surplus in 2012 under current policies, but that would disappear under Bush's plan.
"Under the president's policies, deficits would continue throughout the 10-year period," the report said.
The CBO also noted that Bush's 2006 budget, which only covers five years, did not include any estimates for the cost of adding private accounts to Social Security. Some estimates say that could cost $2 trillion over 10 years.
Democrats blame Bush's tax cuts for adding to the nation's fiscal woes and said the CBO report underscored that point.
"Today's analysis from CBO is the latest in a long line of evidence, all indicating that the administration's fiscal policies are moving us deeper and deeper into debt," said South Carolina Democratic Rep. John Spratt.
"The economy is in full swing right now, jobs are being created and the deficit projections continue to drop," said Sean Spicer, spokesman for the Republican-led House Budget Committee.
© Reuters 2005.
http://today.reuters.com/news/newsArticle.aspx?type=politicsNews&storyID=2005-03-04T205853Z_01_N04206950_RTRIDST_0_POLITICS-CONGRESS-BUDGET-DC.XML
Fri Mar 4, 2005 3:59 PM ET
WASHINGTON (Reuters) - The longer-term deficit outlook will worsen under President Bush's new budget plan, but this year's deficit will be less than White House projections, Congress' fiscal watchdog said on Friday.
This year's deficit under the Bush plan will be about $394 billion, slightly lower than the record $427 billion the White House had forecast, the Congressional Budget Office said in a preliminary assessment.
The CBO report also showed Bush should be able to reach his target of halving the deficit in five years from a starting point of $521 billion. Critics say that figure was inflated.
But the CBO added that over the longer term, the deficit would soar to a cumulative $2.6 trillion over 10 years under the Bush plan, compared with the $980 billion shortfall the CBO had forecast without the proposal.
"Over the 2006-2015 period, the president's proposals would increase the total deficit by an estimated $1.6 trillion," CBO said.
Bush's plan to extend certain tax cuts is the main reason for a loss of $1.4 trillion in revenues under his budget plan, the CBO said.
The agency had also been expecting the deficit to turn to a small surplus in 2012 under current policies, but that would disappear under Bush's plan.
"Under the president's policies, deficits would continue throughout the 10-year period," the report said.
The CBO also noted that Bush's 2006 budget, which only covers five years, did not include any estimates for the cost of adding private accounts to Social Security. Some estimates say that could cost $2 trillion over 10 years.
Democrats blame Bush's tax cuts for adding to the nation's fiscal woes and said the CBO report underscored that point.
"Today's analysis from CBO is the latest in a long line of evidence, all indicating that the administration's fiscal policies are moving us deeper and deeper into debt," said South Carolina Democratic Rep. John Spratt.
"The economy is in full swing right now, jobs are being created and the deficit projections continue to drop," said Sean Spicer, spokesman for the Republican-led House Budget Committee.
© Reuters 2005.
http://today.reuters.com/news/newsArticle.aspx?type=politicsNews&storyID=2005-03-04T205853Z_01_N04206950_RTRIDST_0_POLITICS-CONGRESS-BUDGET-DC.XML
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