Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Just the Facts, Ma'am: A Compendium of Liberal Fiction -- Ignore unavailable to you. Want to Upgrade?

To: Sully- who wrote (1515)	11/21/2003 11:54:50 PM
From: American Spirit	Respond to of 90947

GAO grim on Bush deficit outlook By MARILYN GEEWAX The Atlanta Journal-Constitution WASHINGTON -- The federal government's budget is in far worse shape than most Americans realize, and the fiscal hole is deepening, the head of Congress' nonpartisan watchdog agency said Wednesday. "Our projected budget deficits are not manageable without significant changes" in taxes or spending, U.S. Comptroller General David Walker said in a speech to the National Press Club. "We cannot simply grow our way out of this problem." Walker, who heads the General Accounting Office, said he is a nonpartisan auditor whose job is to "state the facts and speak truth" about the nation's bookkeeping. Current accounting systems fail to adequately reflect just how severe the government's fiscal problems are, he said. "The time has come for all responsible parties to recognize reality," Walker said. "Our nation has a major long-term fiscal challenge that is not going away." Walker's assessment of the budget deficit is far grimmer than the Bush administration's. White House officials have stressed the importance of cutting taxes while calling the deficit a manageable and relatively minor problem. Walker vigorously disagreed. "The bottom line is, there is little question that deficits do matter, especially if they are large, structural and recurring in nature," he said. "The days of surpluses are gone, and our current and projected budget situation has worsened significantly." His comments came as the Treasury Department on Wednesday reported the deficit had reached $400.5 billion for the first 11 months of the 2003 budget year -- twice as much as for the same period a year earlier. Bush stance challenged President Bush has blamed the rise of deficits during his term on the economic recession, the wars in Afghanistan and Iraq and higher spending on domestic security -- not on the tax reductions he championed. Walker, a former Reagan administration official, said Bush's explanations don't add up. "It's true that deficits are understandable and sometimes necessary in times of recession and/or war," Walker said. "However, while it may not seem like it to those who are out of work or underemployed, we have not been in a recession for almost two years." Moreover, projected deficits "far exceed the costs associated with Iraq, the global war against terrorism and any incremental homeland security costs," Walker said. "It is time to admit we are in a fiscal hole and to stop digging." Contacted after Walker's speech, White House spokeswoman Claire Buchan, said Bush "believes that returning the budget to balance is an important priority." However, he must focus right now on "economic security and waging the war on terrorism," she said. "Those priorities are more important at this point." She said tax cuts were needed because "it's important that we make every effort to grow the economy, because a growing economy will help reduce the budget deficit." Stephen Moore, president of the powerful tax-cut advocacy group Club for Growth, said Congress' focus should be on reducing spending. Economic growth will boost government revenues and "tax cuts are an important part of getting the economy going again," he said. At the same time, "we need to do something about this stampeding growth in spending." A daunting reversal After four straight years of budget surpluses through 2001, the government returned to deficit spending in 2002. The Congressional Budget Office said last month that the federal deficit would hit $480 billion next year, far exceeding the previous record of $290 billion in 1992. The CBO also predicted annual budget shortfalls would total nearly $1.4 trillion over the next decade, a stunning reversal from the 10-year, $5.6 trillion surplus it forecast in 2001. Walker said even those daunting figures do not convey the scope of the problem, because conventional government accounting leaves out the impact of benefits promised to Americans under veterans' health programs, Social Security, Medicare and others. "These additional amounts total tens of trillions of dollars," he said. "They are likely to exceed $100,000 in additional burden for every man, woman and child in America today, and these amounts are growing every day." Walker said Congress must make tough choices about both taxes and spending. On Capitol Hill and on the campaign trail, Democrats have seized upon the rising deficit to criticize Bush for his support for massive tax cuts in 2001 and 2003. Members of both major political parties are expected to focus on the deficit in the coming week as Congress considers the president's request, made formally Wednesday, for an additional $87 billion for military operations and rebuilding in Iraq and Afghanistan.