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

To: pompsander who wrote (746080)	7/25/2006 6:30:01 PM
From: DuckTapeSunroof	Respond to of 769670

Re: "... Now the old-line conservatives have had enough." Yep. No desire to sink themselves with the ship... they are speaking out (and casting around for a new standard bearer.)

To: pompsander who wrote (746080)	7/25/2006 7:51:16 PM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 769670

Treasury: Spending cuts add octane to tax cuts By William L. Watts, MarketWatch Last Update: 2:41 PM ET Jul 25, 2006 marketwatch.com WASHINGTON (MarketWatch) -- Extending President Bush's first-term tax cuts would increase economic growth over the long run, but the lower rates must be offset by reduced spending to have the most impact, according to a Treasury Department study released Tuesday. The release of the study offers some key details of the report which was first previewed in the White House Office of Management and Budget's mid-session budget review earlier this month. As reported at the time, the dynamic-analysis study concluded that making Bush's first-term tax cuts permanent could increase the level of annual output by about 0.7%. Crucially, however, that increase would happen only if the tax cuts are financed by lower spending, the report said. If tax rates rise in the future to offset the revenue loss, the tax relief "would increase national output in the short run, but long-run output would decline as future tax rates increase," the study concluded. Critics of the administration's policies have estimated that a 0.7% increase in annual output would negate claims by President Bush that the tax cuts have boosted economic growth to a degree that offsets revenue losses. "Some in Washington say we had to choose between cutting taxes and cutting the deficit .... Today's numbers show that that was a false choice," Bush said on July 11, announcing that the White House now expects the federal deficit for the current fiscal year to total $296 billion, down from the administration's earlier projection of $423 billion. See full story. The administration and tax-cut advocates contend that an unexpected surge in revenues has stemmed in large part from Bush's 2003 tax cuts, including a reduction in the tax rate on capital gains and dividends. Looking at the year 2016, the Center on Budget and Policy Priorities, a persistent critic of the administration's fiscal policies, estimated earlier this month that the additional revenues that would result from a 0.7% increase in annual output in 2016 would come in around $29 billion -- "less than 10% of the $314 billion that the Joint Committee on Taxation estimates extending the tax cuts will reduce revenues in 2016." End of Story William L. Watts is a reporter for MarketWatch.