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To: Bucky Katt who wrote (10488)	2/4/2003 9:54:09 AM
From: Bucky Katt	Respond to of 48461

The Prez proposed a $2.23 trillion budget heavily tilted toward defense. The plan, which calls for $1.3 trillion in new or accelerated tax cuts over 10 years and proposals to cut social programs, projects a $307.4 billion deficit and sees similar shortfalls continuing at least until fiscal 2007. The White House paints an optimistic economic picture for the next few years, with stronger growth and lower unemployment, inflation and interest rates than either private economists or the Congressional Budget Office expect. While outside analysts don't think the economic forecast is overly optimistic, some questioned the large increases in tax revenue that the economic growth is expected to generate. Revenue is expected to fall 1% in the current fiscal year ending Sept. 30, grow 5% in fiscal 2004, in line with the economy, then jump 11%, or $213 billion, in 2005. The 2005 increase would be the largest relative to the size of the economy since 1969. "That seems like a big jump," said Brookings Institution scholar William Gale. Administration officials attribute the jump to conservative assumptions for 2003 and 2004 and quirks of some tax-law changes. The economic projections "strike a balance between upside and downside risks," the White House budget says. The budget assumes that President Bush's income-tax cuts will spur consumer spending, while the abolition of taxes on dividends will boost business investment and stock prices. Higher stock prices would also make consumers feel wealthier and, thereby, spend more. "As the expansion picks up speed, the usual virtuous circle of more jobs, more spending and more capital investment will be firmly established," the budget says. The White House sees the economy growing 2.9% this year, faster than the 2.8% consensus of private forecasters surveyed by the publication Blue Chip Economic Indicators and the 2.5% assumed by the nonpartisan CBO.