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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (51571)	1/26/2006 2:07:15 PM
From: GST	Read Replies (1) \| Respond to of 110194

LOL! I would not be in China one day and Florida the next if I did not see them as connected.

To: mishedlo who wrote (51571)	1/26/2006 2:34:43 PM
From: shades	Respond to of 110194

J UPDATE: CBO: US Budget Deficit For FY2006 To Hit $337 Bln . (Adds details, reactions throughout) By John Godfrey Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--The U.S. government will amass a $337 billion annual budget deficit in fiscal year 2006, according to Congressional Budget Office estimates released Thursday. The estimate is $23 billion more than the $314 billion deficit estimate CBO made in August. Higher government spending associated with the cleanup and recovery from Hurricane Katrina since the Oct. 1 beginning of the 2006 fiscal year are largely to blame. But CBO predicts the budget outlook will quickly improve. In August, CBO predicted deficits from 2007 through 2011 would total $1.5 trillion. But that estimate narrowed on Thursday to $1.1 trillion. The government's anticipated good fortunes, however, are still expected to turn when workers from the "baby boom" generation begin to retire, putting strains on both Social Security and Medicare. "While today's news underscores the strength and resilience of our economy, it also reminds us that controlling the budget is a long-term, step-by-step commitment," said House Budget Committee Chairman Jim Nussle, R-Iowa. The annual budget deficit hit a nominal dollar high of $412 billion in 2004 and narrowed to $319 billion in 2005. CBO estimated in August that deficits would hover at $320 billion to $330 billion through 2010, when tax cuts enacted in President George W. Bush's first term are set to expire. On Thursday, CBO said that a change in certain economic variables meant it now thinks that if the government continues on its current tax and spending path, annual deficits will lessen steadily to $220 billion by 2010. CBO said that its underlying assumptions about economic growth are largely unchanged, but that revisions to the National Income Product Accounts have changed enough to cut projected deficits by about $100 billion annually in the mid-term. CBO assumes that real gross domestic product will grow at a rate of 3.6% in 2006 and 3.4% in 2007. In August, CBO predicted GDP would grow at a rate of 3.4% in 2006. Relatively unchanged is CBO's estimate for annual average real GDP growth over the next five years. In August, CBO said that rate would be 3.2%, but said Thursday it would be 3.1%. The estimates do not include the cost of the ongoing war in Iraq beyond the $50 billion appropriated for fiscal year 2006. Nor does it include the cost of paying flood insurance claims related to Hurricane Katrina. CBO said that if those costs were included in its estimate, the fiscal year 2006 deficit would be closer to $360 billion. The estimates also do not include the cost of the five-year, $70 billion tax cut Congress is expected to consider this winter. Conversely, it also does not include the benefit of a five-year, $40 billion budget cutting bill Congress could send to the White House as early as February. CBO said the bill will likely lessen the estimated deficit by about $5 billion. The White House's Office of Management and Budget said that when Bush releases his budget in February, it will project a deficit of more than $400 billion for fiscal year 2006. "The OMB estimate will be higher primarily because of additional funding for the War and for recovery and rebuilding needs in response to Hurricane Katrina, as well as the estimated costs associated with the one-year extension of relief from the Alternative Minimum Tax," said OMB official Alex Conant. CBO's estimates are admittedly imprecise, but better than, or at least as good as, any others available. And because they are provided by a non-partisan government entity, they provide the benchmark by which lawmakers will measure future budget efforts. -By John Godfrey, Dow Jones Newswires; 202-862-6601; John.Godfrey@dowjones.com