CBO: Bush plan creates $394B fiscal ´05 deficit
Friday, March 4, 2005 10:13:34 PM
forexstreet.com
Bush plan creates $394B fiscal '05 deficit WASHINGTON (AFX) - President Bush's budget plan will result in a $394 billion deficit this fiscal year, the Congressional Budget Office estimated Friday
That's smaller than the White House's projected $427 billion shortfall in its fiscal 2006 budget submission last month. In fiscal 2006, which begins Oct. 1, the CBO estimates the deficit would total $332 billion, compared to a $390 billion White House forecast
"The economy is in full swing, jobs are being created and the deficit projections continue to fall," said House Budget Committee Chairman Jim Nussle, R-Iowa. Nussle said he will submit his own budget plan next week, which "will promote continued growth, continued strength and restrained spending." Democrats said CBO analysis hardly presents an optimistic picture
"CBO's analysis shows that under the Administration's policies, the annual deficit never falls below $229 billion over the next 10 years, and all $2.5 trillion of the Social Security Trust Fund surplus will be borrowed and spent to cover deficits in the administration's budgets," said Rep. John Spratt of South Carolina, the senior Democrat on the House Budget Committee
The CBO notes that the Bush budget doesn't include any figures related to Bush's call to add private-investment accounts to Social Security. The White House separately estimated that borrowing costs for that plan would total $754 billion from 2009 to 2015. Analysts estimate the costs could total $2 trillion over the first full decade of an accounts plan
The Bush budget plan also omits any estimate of the cost of ongoing military operations in Iraq and Afghanistan for 2006. The CBO analysis sees the deficit at $246 billion in fiscal 2009, which would leave Bush on track toward his goal to halve the deficit from an earlier $521 billion projection - which proved to be too high -- in fiscal 2004. Critics note the administration isn't on track to halve the deficit from the actual 2004 gap of $412 billion
CBO estimates that in the decade from fiscal 2006 through 2015, annual deficits would total $2.58 trillion, about $1.6 trillion more than CBO projected when it issued its own baseline report in January. The White House projections go out only five years
Most of the increase comes from the extension of Bush's first-term tax cuts, all of which are otherwise slated to expire by 2011 |
