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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Neeka who wrote (174133)	8/24/2001 2:15:06 PM
From: goldworldnet	Read Replies (1) \| Respond to of 769670

Little secret... Bush knew there wasn't a surplus and never was, but that a tax cut was the right thing to do. * Surplus erased through 2003 White House report forecasts little room for spending hikes By JOHN C. HENRY Copyright 2001 Houston Chronicle Washington Bureau WASHINGTON -- President Bush's tax cut and a sluggish economy have virtually erased anticipated federal budget surpluses through 2003, according to a White House forecast that shows little room for increasing spending on administration priorities like defense and education. RESOURCES Charts: • Budget surplus is second-largest • Shrinking surplus Although the revised budget estimates released Wednesday show the government ending the budget year with about $158 billion in excess revenues, all but about $600 million of that is headed into the politically sensitive Social Security trust fund. Likewise, the administration sees a cushion of about $1 billion in non-Social Security funds next year, a forecast that relies on a vigorous economic recovery. The revised budget figures prepared by the White House Office of Management and Budget are based on expectations that next year's gross domestic product will grow at a rate of 3.2 percent, nearly double the 1.7 percent forecast for this year and well above the 2.8 percent that is the consensus of many private economists. White House Budget Director Mitch Daniels said the president's $1.35 trillion, 10-year tax cut, a slight growth in government spending for next year, and recent interest rate cuts by the Federal Reserve will combine to expand economic growth and bolster tax revenue in 2002. "Economic growth is the key to continuing this very strong fiscal picture," Daniels told reporters. A grimmer view of the disappearing surplus is likely next week from the nonpartisan Congressional Budget Office, whose analysts are expected to forecast a slower economic recovery and lower government revenues. The CBO is likely to report that the government already has begun spending money from the Social Security trust fund. The forecast prepared by Daniels' staff shows that the surplus for the budget year ending Sept. 30 will total $158 billion, down from $281 billion in April. These figures include excess Social Security funds that the president and congressional leaders have promised not to spend on other government programs. Of the $123 billion decline in this year's surplus, $40 billion is being refunded this summer to taxpayers as part of Bush's tax cut plan. The tax bill also shifted the due date for $28 billion in corporate taxes into the next budget year. And another $46 billion decline in revenue was attributed to the economic slowdown. In 2002, the OMB said, the surplus would total about $173 billion, with $1 billion of that coming from outside Social Security. In 2003, the surplus would hit $195 billion, including $2 billion of non-Social Security money. In April, OMB estimated that non-Social Security surpluses would total $56 billion in 2002 and $49 billion in 2003. Looking further ahead, the OMB forecast an overall federal surplus of more than $3.1 trillion over the next decade, down from the $5.6 trillion estimated in April before the tax cut and other revenue changes. White House officials and their Republican allies in Congress -- emphasizing the overall estimates, including Social Security -- brushed aside criticism that the once-flush budget surpluses for the next several years had been squandered. "This is the second-largest surplus in American history, in the face of that weak economy, a phenomenon that should strike all Americans as very positive," Daniels said. "The nation is awash in money, and it will be." Democrats accused the administration of bookkeeping gimmickry to show the 2001 budget had been balanced without dipping into the Social Security surplus. For instance, the administration changed a 65-year-old accounting practice to free up$4 billion in Social Security money from previous years and assumed corporations would pay $5 billion in taxes earlier than expected under the new tax law. "I believe they've cooked the books to avoid the appearance of what is actually happening," said Sen. Pete Conrad, a North Dakota Democrat who chairs the Senate Budget Committee. The senator said the administration's economic forecast for 2002 is unrealistic but essential to keeping Bush's promises for more defense and education spending without dipping into the Social Security trust fund. "They have got a phony budget, and they're going to have nothing but trouble because they tried to make their big tax cut fit in," Conrad said. Rep. Ken Bentsen, a Houston Democrat on the House Budget Committee, said Bush is going to "have a problem meeting his commitments" to increase funding for prescription drugs, defense and education. "He's put the country in a very severe fiscal straitjacket," Bentsen said. The president "likes to point his finger and say `Congress has to keep the lid on,' but he's requesting most of the new spending." "In a very short period of time, the president has been able to take a very large surplus, excluding Social Security and Medicare, and eliminate the vast majority of it with little more than his tax cut to show for it," Bentsen said. Republicans quickly defended Bush and his tax cut. "The declining budget surplus projections are the inevitable result of an economic slowdown George W. Bush inherited from the previous administration," said House Majority Whip Tom DeLay, R-Sugar Land. "By criticizing tax relief, Democrats are still fighting the last battle," DeLay said. "Just as Americans are receiving the tax rebate checks they earned and deserve, the Democrats are still on their summer guilt trip." In Crawford, where the president is vacationing, White House spokesman Ari Fleischer said the declining surplus "is a warning signal" to Congress to restrain spending, particularly on anything other than Bush's priorities. chron.com * * *