Here is the article you referenced........I don't interpret it the same as you do. It is clearly pointing at deficit spending............that's not shrinking the surplus.........that's obliterating it.
Huge Decline Seen in Budget Surplus Over Next Decade
By RICHARD W. STEVENSON
ASHINGTON, Jan. 5 — Analysts from both parties say the budget surplus for the next decade has shrunk to less than a third of what was projected a year ago, setting up an especially intense partisan battle over taxes and spending in the midst of an election-year recession.
As the Bush administration and Congress prepare to debate a new round of budget proposals, the analysts said the government's $2 trillion annual budget was likely to end up tens of billions of dollars or more in the red for each of the next several years before returning to surpluses for the rest of the decade.
The government will end up in deficit for at least the next few years, they predicted, despite pressure from the White House for budget cuts or freezes in many areas outside the campaign against terrorism.
"We're a world away from where we were at this time last year," said Representative John M. Spratt Jr. of South Carolina, the senior Democrat on the House Budget Committee. "I'm not sure how you solve this equation, arithmetically or politically."
The new figures, developed separately by the Democratic staff of the House Budget Committee and the Republican staff of the Senate Budget Committee, are an effort to predict official figures to be released by the nonpartisan Congressional Budget Office this month and the White House's Office of Management and Budget next month.
Chart: Projected Budget Surplus
In Depth
Congress
The numbers developed by the two staffs are very similar. They provide a clear sense of the scale of the reversal in the nation's fiscal fortunes in the wake of the economic downturn, the Sept. 11 attacks and the $1.35 trillion tax cut President Bush pushed through last year over opposition from most Democrats.
With the money drying up and Democrats and Republicans facing painful choices between cutting the budget and abandoning any pretense of fiscal responsibility, the political and economic considerations are complex.
Democrats have attacked the Bush tax cut, arguing that it has sliced deeply into the surplus, and they are trying to link it to the recession by suggesting that the resulting budget problems are keeping long- term interest rates higher than they would normally be during a downturn.
Mr. Bush and Republicans on Capitol Hill are defending the tax cut as appropriate medicine for the weak economy and using the figures to increase pressure on Democrats to hold down spending increases.
In his weekly radio address, President Bush said he would meet with his economic advisers when he returned on Monday from a trip to California and Oregon, "to discuss the latest economic data and work for a quick recovery for our economy." He urged Congress to act on his proposals, which include further tax cuts and provisions to benefit unemployed workers, ideas that would further increase the deficit.
With surpluses apparently having given way to deficits in the short run, and with the long-term surplus a fraction of what was anticipated a year ago, both parties are being forced to scale back plans for initiatives like providing retirees with help buying prescription medicine.
They also seem to have little chance of making good on their pledges to use the part of the budget surplus generated by Social Security to pay off most of the $3.3 trillion national debt in the next decade.
In a report completed on Friday, the Democratic staff of the House Budget Committee estimated that the surplus for the 10 years ending in 2011 would be $1.79 trillion, compared with a projection by the Congressional Budget Office a year ago of $5.61 trillion for the same period. The 10-year outlook is likely to be slightly brighter in the forecast the Congressional Budget Office will release this month, because that projection will add the estimated surplus for 2012 and drop the presumed deficit for this year.
The Democratic analysts said the budget for the current fiscal year, which ends Sept. 30, was on track to run a deficit of at least $3 billion. That figure, though, rests on the assumption that Congress and the administration do not increase spending on the war, domestic security and programs like aid to farmers.
More likely, the Democrats said, the deficit this year will be a minimum of $15 billion once those issues are addressed, and much more if the two parties agree on an economic recovery package. Just a month ago, the two parties were considering economic stimulus plans that would have cost as much as $90 billion this year.
For next year, the Democratic analysis said, the deficit would be at least $43 billion and more likely would be $70 billion or above.
In a report completed last week, the Republican staff of the Senate Budget Committee estimated that the surplus for this fiscal year through 2011 would be $1.86 trillion.
The Republican analysis showed the government eking out a $1 billion surplus this year and next year. But because that projection did not account for the near certainty that Congress would approve more money for fighting the war and for other issues, Republicans said they assumed the budget would end up tens of billions of dollars in deficit for those years, especially given the election-year pressure on both parties to increase spending.
"It puts a lot of things in a tight box," said G. William Hoagland, the Republican staff director for the Senate Budget Committee.
Both the Democratic and Republican figures show the government dipping into the Social Security surplus to pay for general government operations for most of the decade, significantly reducing the amount of money available for debt reduction.
"If we had one agreement that was bipartisan and bicameral, it was that we would save the Social Security surpluses by buying up the national debt," Mr. Spratt said. "As you go through these numbers, you see any hope of accomplishing that dashed."
The worsened fiscal outlook has created a bind for Mr. Bush, whose team is completing the budget plan he will submit to Congress on Feb. 4, covering the fiscal year that starts on Oct. 1. Mr. Bush is scheduled to meet in the coming week with his budget director, Mitchell E. Daniels Jr., to sign off on the final numbers.
Mr. Daniels said he expected the administration's deficit and surplus projections to be similar to those of the Congressional Budget Office and those developed by analysts within the two parties. He said that the 10- year surplus projections would be scaled back substantially, and that for the next two years the budget would be roughly in balance before the costs of any new initiatives.
Mr. Daniels said the budget that Mr. Bush will submit will call for overall growth in spending, primarily by increasing financing for the Pentagon and for domestic security programs.
"You can look for the rest of government to grow, but much more slowly," he said. "
Administration officials said that programs like the National Science Foundation and the Women, Infants and Children program, which provides healthy food to poor children and pregnant women, would get more money under their plan.
But Congressional aides from both parties said the administration has signaled that it intends to freeze or cut many other programs, including the Smithsonian Institution and the Army Corps of Engineers, all of which have powerful patrons inside and outside Congress.
Senator Kent Conrad, the North Dakota Democrat who is chairman of the Budget Committee, said the budget squeeze was a direct result of Mr. Bush's tax cut, which he said was sold on the basis that last year's surplus projections were, if anything, too pessimistic.
"Now we're seeing real consequences, in terms of seeing a flood of red ink facing us not just this year but for years to come," Mr. Conrad said. |
