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Archive for Friday, January 27, 2006

Deficit on way to hit $337B

Bush says tax relief still doable

January 27, 2006

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— The budget deficit will rise to at least $337 billion this year and may well approach or exceed $400 billion because of tax cuts and new spending for hurricane relief and the war in Iraq, congressional budget analysts said Thursday.

The latest Congressional Budget Office data also suggest President Bush is unlikely to be able to keep his promise to cut the federal deficit in half by the end of his term.

Even assuming a phasing down of the war in Iraq and the costs of hurricane relief, enacting tax cuts sought by Bush and Congress would produce deficits exceeding $300 billion through the end of the decade, the nonpartisan CBO says.

The report and Bush's annual budget submission kick off a predictably partisan election-year debate about the budget.

Bush promised in 2004 to close the deficit from a then-estimate of $521 billion to $260 billion by 2009, and he promised again Thursday to meet that goal.

"We can cut our deficit in half by 2009 and make sure the American people still get their tax relief," Bush told reporters.

The government recorded a $319 billion deficit for 2005. The record deficit in dollar terms of $413 billion was registered in fiscal 2004.

Economists say the more significant measure is against the size of the economy. In those terms, CBO's 2006 deficit prediction would equal 2.6 percent of gross domestic product and would be significantly better than deficits witnessed in the mid-1980s and early 1990s. Then, deficits of 4 percent to 6 percent of GDP were common.

Comments

b_asinbeer 8 years, 2 months ago

"We can cut our deficit in half by 2009 and make sure the American people still get their tax relief"

Tax relief for which Americans? I haven't been paying less taxes, nor have I been getting money back. Of course I don't fall into the rich bracket like the majority of my fellow Americans, so that's to be expected.

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