How Shrub's "Enron-style" Accounting Has Cost Us
Travis Bickle
Remember those eight wonderful years of peace and unprecedented
prosperity under Bill Clinton? Well, you can forget all about them
now.
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US deficits are forecast through '05
Budget office cites big drop in tax revenue
By Sue Kirchhoff, Globe Staff, 8/28/2002
WASHINGTON - The federal government faces years of budget deficits,
rising debt, and a dwindling Social Security surplus, due in part to
the smirking chimp in the White House as well as the sharpest decline
in federal tax revenue since the end of World War II, the nonpartisan
Congressional Budget Office said yesterday.
In its twice-yearly budget review, the CBO predicted the government
would run a $157 billion deficit this year and remain in the red
through 2005 before beginning to post small surpluses. Overall, it
forecast a $1 trillion surplus for the 10-year period from 2003-2012,
down dramatically from its March calculation of a $2.4 trillion
cushion.
The figures, however, do not include the potential costs of big-ticket
items such as President Bush's effort to extend his $1.35 trillion tax
cut, which expires at the end of 2010; a Medicare prescription drug
benefit; or a possible invasion of Iraq. Those initiatives easily
could wipe out the remaining surplus.
The report is far more pessimistic than White House predictions
earlier this summer that the government would post about $2.5 trillion
in black ink during the next decade.
The CBO said about half the deterioration in the budget figures since
March was due to increased spending, including higher interest costs
to service growing public debt. The other half arose from the fact
that federal tax receipts have been far less robust than expected,
even given the faltering economy and plummeting stock market, which
has cut into capital gains receipts.
The budget office cut its revenue projections by a whopping $678
billion over the next decade and warned the shortfall could grow.
''This is the largest decrease year to year in revenues since 1946''
when World War II surtaxes were lifted, said CBO Director Dan Crippen.
He said analysts did not yet have enough detailed data to determine
exactly why revenues - which were far higher than expected during the
1990s boom - have been so much lower during the downturn.
While Crippen focused on the economics, lawmakers foused on the
politics, blaming each other for the worsening fiscal picture. When
Bush took office the 10-year surplus, through 2011, was estimated at
$5.6 trillion. That number now is about $300 billion.
Though the economy and terrorist attacks have been the major factors
affecting the budget in the short term, Democrats said Bush's tax cut
was the biggest single reason for the 10-year budget bleed. They
accused the White House of writing rosy economic forecasts to justify
its policies, and warned that if Congress adopted his tax and spending
policies, the budget could be in deficit for the next decade.
''There's not going to be maximum paydown of the debt like the
president promised, instead there's going to be a maximum taking of
the Social Security surplus, '' said Senate Budget Committee Chairman
Kent Conrad, a North Dakota Democrat, who along with other Democrats
called for a budget summit with the White House. He accused the
administration of using ''Enron-style'' accounting to generate its
more optimistic economic forecast.
The CBO surplus numbers include Social Security payroll taxes. If $2.5
trillion in projected Social Security revenues were not included, the
goverment would be in deficit throughout the 10-year period.
The Democratic concerns are echoed by some market analysts and
independent economists, who expect the revenue situation to worsen -
and projected deficits to widen - in coming months.
White House Budget Director Mitch Daniels, who is bracing for a series
of fall battles with Congress over annual spending bills, said the
report underscored the need for discipline in Congress.
''While CBO's report confirms that the recession, the weakened stock
market and the war caused the deficit, it does show a turn back toward
balanced budgets with the right choices,'' Daniels said. ''This is
precisely why we should control what we can, which is spending.''
Daniels acknowledged some slippage in the revenue numbers since the
White House estimates were released.
White House press secretary Ari Fleischer, speaking from Bush's ranch
in Crawford, Texas, reiterated Bush's willingness to oppose spending
bills he thought were excessive. But conservatives are angry at Bush
for signing a farm bill increasing crop subsidies, as well as
endorsing a Medicare drug benefit in excess of the White House's
original request.
The Congressional Budget Office's Crippen said the forecast deficits,
as a percentage of the overall economy, were nowhere near the
crippling levels of the 1980s. The CBO expects the current business
recovery to continue, with productivity rising and the economy growing
2.3 percent this year and 3 percent next year. The CBO now expects
publicly held federal debt to total about $2.7 trillion at the end of
2012, up from estimates of $1.1 trillion in March.
But Crippen warned that even if the government began posting small
surpluses again, starting in 2006, it would constitute just a
temporary reprieve. The retirement of baby boomers will begin putting
enormous stress on the federal budget, starting at the end of this
decade. The number of people receiving Medicare and Social Security
benefits is expected to nearly double to about 80 million.
Unless Congress acts, spending on Medicare, Medicaid and Social
Security alone could eventually consume as much money as the federal
government now spends on all federal programs, Crippen said.
"Bush is smart enough to know that he's not smart.
So he surrounds himself with smart people, the way
a hole surrounds itself with a donut" Dennis Miller
"I know how hard it is to put food on your family" Duh-Duh-Duhbya