President Bush's Successful Deficit Reduction
By Mark Noonan at 07:28 AM
Yet another "read it and weep, liberals" piece:
Aided by surging tax receipts, President Bush may make good on his pledge to cut the deficit in half in 2006 — three years early. Tax revenues are running $176 billion, or 12.9%, over last year, the Treasury Department said Monday. The Congressional Budget Office said receipts have risen faster over the first eight months of fiscal '06 than in any other such period over the past 25 years — except for last year's 15.5% jump.
The 2006 deficit through May was $227 billion, down from $273 billion at this time last year. Spending is up $130 billion, or 7.9%.
The CBO forecast in May that the 2006 deficit could fall as low as $300 billion. Michael Englund, chief economist of Action Economics, has long expected a deficit of about $270 billion this year. Now he thinks there's a chance the "remarkable strength in receipts" will push the deficit even lower.
With the economy topping $13 trillion this year, a $270 billion deficit would equal less than 2.1% of GDP, easily beating the president's 2.25% goal. Bush made his vow when the White House had a dour 2004 deficit forecast of 4.5% of GDP, or $521 billion. The actual '04 deficit came in at $412 billion, or 3.5% of GDP, before falling to $318 billion, or 2.6% of GDP, in 2005.
A CBO analysis last week noted that withheld individual income and payroll taxes are up 7.6% from a year ago, with the gains picking up in recent months.
"Those gains suggest solid growth in wages and salaries in the national economy," CBO said.
While gains are broad, those at higher-income levels are enjoying bigger salary hikes. Because they pay higher rates, federal tax revenues soar when they do well.
Those making over $200,000 now pay 46.6% of total income taxes...
Uh, liberals, the tax cuts work - its really quite simple, and we on the right really don't understand why you don't get this: When you leave more money in the private economy, it gets used more efficiently and thus increases the size of the economy, thus allowing higher tax revenues even at a lower tax rate. This isn't rocket science - and this has worked every time it has been tried.
My bet is that by the time President Bush leaves office the budget will be either balanced, or so close to it as makes no matter - and this, mind you, done in the wake of a dot-com bubble, corporate fraud, Clinton recession, 9/11 attacks and ongoing war. Not a bad effort, if you ask me. |
