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

To: Kenneth E. Phillipps who wrote (671695)	2/8/2005 5:26:38 PM
From: DizzyG	Read Replies (2) \| Respond to of 769670

The Illusory Budget Surplus President Clinton has argued this year's budget surplus provides an historic opportunity to "save Social Security." However, Northwestern University economist Robert Eisner has pointed out that Clinton's request is "a great political play...but it's economic nonsense." In fact, the federal budget only appears to be in surplus because the Social Security program collects more in payroll taxes than it pays out in benefits. Removing Social Security's surplus from the books shows that the government ran a $29 billion deficit in fiscal year 1998, not a $70 billion surplus. Excluding Social Security, the most recent forecast by the Congressional Budget Office projects the budget won't record a noticeable surplus until 2006 -- a situation which will last only a few years (see figure). The cumulative "budget surplus" over the next 10 years will amount to $1.5 trillion, almost entirely due to the projected surplus in Social Security. Even though Social Security payroll taxes have outpaced benefit payments for years, only recently has the government had any money left over after covering the current spending deficit. But total government debt -- the sum of the debt held by the public and the Social Security trust funds -- continues to grow (see figure). And these obligations can only be met by raising taxes, cutting spending or issuing more debt. ncpa.org

To: Kenneth E. Phillipps who wrote (671695)	2/8/2005 5:27:38 PM
From: DizzyG	Respond to of 769670

Yesterday the Congressional Budget Office (CBO) released its preliminary reestimate of the White House budget. This follows the Joint Committee on Taxation's (JCT) reestimate of the Clinton White House's tax provisions last week. Together, CBO and JCT are Congress' official estimators -- nonpartisan entities that Clinton himself promised to use when he first took office back in 1993. President Clinton has promised to protect Social Security, to reduce the debt to the maximum extent possible, to control spending, and reduce taxes. But, Congress' official estimators show that on all four counts, the President's budget fails. Instead, Clinton's budget raids the Social Security trust fund for $158 billion in five years, it artificially erases the surplus, it lowers the public debt less than doing nothing would, it increases spending, and it raises taxes by $89.7 billion over the 1999-2009 period. Clinton Raids Social Security: According to CBO, Clinton spends $40 billion of the Social Security surplus in his budget's first year (2000) and $158 billion over the first five years (2000-2004). This is the same Social Security surplus that he has promised to save in its entirety. Clinton Reduces the Surplus: According to CBO, Clinton's budget actually reduces the overall surplus by $436 billion from 2000-2004 and by $1.168 trillion from 2000-2009. That means less debt reduction than doing nothing. Even without the effects of Clinton's phony Social Security transfer scheme [see RPC paper, "Clinton's Latest Budget: Honestly Phony," 2/1/99], Clinton's budget actually reduces the on-budget (non-Social Security) surplus by $73 billion from 2000-2004 and by $92 billion from 2000-2009. Because he's reduced the surplus, Clinton wipes out completely what would have been an on-budget (i.e., without Social Security) surplus beginning in 2001 of $11 billion and $829 billion from 2001-2009. That is $829 billion in general revenue surplus that should have been returned to the taxpayers. Clinton Reduces the Public Debt Less Than Doing Nothing: According to CBO, Clinton's budget actually reduces the public debt less than doing nothing would -- less by $432 billion over five years, and less by $1.155 trillion over ten years The public debt stands at $3.628 trillion in 1999. Public debt would stand at $3.189 trillion in 2004 under Clinton's budget -- however without the Clinton budget it would stand at $2.756 trillion, according to CBO. Public debt would stand at $2.324 trillion in 2009 under Clinton -- however without the Clinton budget it would stand at $1.168 trillion, according to CBO. Instead of reducing the public debt by two-thirds as would occur without the Clinton budget, Clinton would reduce it roughly half as much -- by just over one-third. Clinton on Spending...and spending and spending and spending: According to CBO, even without Clinton's Social Security proposal, his budget will raid the surplus to pay for new and increased spending to the tune of $31 billion in 2000, $125 billion from 2000-2004, and $188 billion from 2000-2009. As a result, Clinton breaks the agreed-on budget caps by $30 billion in 2000, according to CBO's estimate. Clinton on Taxes . . . and taxing and taxing and taxing: According to JCT, the Clinton Administration is nonetheless requesting gross tax and revenue increases of $80 billion from 1999-2004 and $165.1 billion from 1999-2009. Even after deducting Clinton's paltry tax cut proposals, JCT estimates that the Clinton budget contains net tax and revenue increases of $49.7 billion from 1999-2004 and $89.7 billion from 1999-2009. This fits Clinton's pattern of behavior: he's never proposed a net tax cut since becoming President, and he is not proposing one this time -- despite having projections of the largest budget surpluses in U.S. history. Furthermore -- by artificially creating an on-budget deficit (in the non-Social Security portion of the federal budget) -- Clinton would preclude a tax cut, not just for the remainder of his term, but for as far as the eye can see. In short, Clinton raids Social Security, he artificially erases the budget surplus, he reduces the debt less than doing nothing would, he increases spending, he fails to adhere to the agreed-to spending caps, and he increases taxes. And this despite the emergence of a record-breaking surplus. senate.gov