RECORD BREAKING DEFICIT

[CrimsonTide4]

Sources: CBO Sees $477 Billion Deficit in 2004
1 hour, 31 minutes ago Add U.S. National - Reuters to My Yahoo!


By Andrew Clark

WASHINGTON (Reuters) - The Congressional Budget Office (news - web sites) on Monday forecast a slight improvement in this year's record federal budget deficit, but new evidence of worsening deficits over the next decade pose political problems for President Bush (news - web sites) in this election year.


Reuters Photo



In its bi-annual budget outlook, details of which were obtained by Reuters from congressional sources, the nonpartisan agency forecast a federal deficit of $477 billion in 2004, only $3 billion less than the last forecast made in August.


It predicted next year's deficit will total $362 billion, up from $341 billion predicted in August. Based on current federal spending plans and tax policy, the deficit is expected to reach nearly $1.89 trillion between 2005 and 2014, up from prior predictions of $1.4 trillion in the next decade.


The government's previous record deficit of $374 billion, posted in fiscal year 2003, easily eclipsed the prior high of $290 billion set in 1992. The shortfall predicted for 2004 would still be less than levels seen in the early 1980s when considered as a percentage of the size of the U.S. economy.


While the U.S. budget outlook may not have changed too much over the past six months, the political situation has recently shifted significantly where fiscal matters are concerned.


POLITICAL UNEASE


Democrats have long slammed Bush and his big tax cuts for the steep slide in the government's finances since the record budget surplus of $236 billion in 2000. But their criticisms have not yet struck much of a chord outside Washington.


Now, however, just as the White House prepares to roll out its 2005 budget on Feb. 2, Bush has also begun taking fire from conservatives within his own party for not laying out concrete plans to cut government spending and reduce the deficit.


That led administration officials to promise on Thursday an effective freeze on federal discretionary spending next year not connected to defense or homeland security, calling that the foundation of a plan to halve the deficit in the next five years. Automatic payments such as Social Security (news - web sites) and Medicare would not be affected.


Congressional and private-sector budget analysts, however, note the move would save the government only around $8 billion dollars out of a $2 trillion-plus federal budget -- even if Congress can be made to swallow the cuts it would require.


"It's more like an effort to get through the next 10 days," said Stan Collender, a veteran budget watcher at public relations firm Fleishman Hillard. "It isn't going to happen."

[moe.ron]

Based on current federal spending plans and tax policy, the deficit is expected to reach nearly $1.89 trillion between 2005 and 2014, up from prior predictions of $1.4 trillion in the next decade.

Scary huh. How much is a trillion? I got this from a chain mail:

Here’s what a trillion looks like: 1,000,000,000,000.

It is estimated that if you counted normally, "One, two, three ... ," it would take you 200,000 years to count to one trillion.

One trillion seconds ago - 31,688 years -Neanderthals stalked the plains of Europe.

If you had gone into business on the day Jesus was born and you lost $1 million a day, 365 days a year, it would take you until October 2737 to lose a trillion dollars.

Western civilization has not been around for one trillion seconds.

If you stacked up one trillion dimes, you would have three stacks that reach the moon, and have plenty left over.

[CrimsonTide4]

If you had gone into business on the day Jesus was born and you lost $1 million a day, 365 days a year, it would take you until October 2737 to lose a trillion dollars.

That's deep!!!

[AXEAM]

DON'T FORGET THE WAR AND THE OVER 500 DEAD U.S TROOPS WHO DIED B/C ONE MAN'S LIES

[RBL]

Wow..

All that money and we couldn't find any money for education or building improvements for our public schools that so desperately needed it. But if you disguise it under "war on terrorism" most Americans will go for it. (sigh)

NOTE: We still have not discovered the ever elusive "weapons of mass destruction"

06

[Steeltrap]

Originally posted by RBL
Wow..

All that money and we couldn't find any money for education or building improvements for our public schools that so desperately needed it. But if you disguise it under "war on terrorism" most Americans will go for it. (sigh)

NOTE: We still have not discovered the ever elusive "weapons of mass destruction"

06

Sadly, there's going to be unease about improving public schools, particularly inner-city ones, because of who's getting educated there. And you also have a lot of people who don't want their tax dollars getting thrown at it -- that led to the creation of Prop. 13 back in Cali in 1978 and the rotting of many public school districts out here.

I'm not condoning it, but that is a reality.

[CrimsonTide4]

White House to Project Deficit of $521 bln in 2004
36 minutes ago Add Top Stories - Reuters to My Yahoo!



WASHINGTON (Reuters) - The White House will project that the federal budget deficit will peak this year at $521 billion, surpassing congressional estimates and shattering previous records, people familiar with the budget said on Thursday.



The White House sees improvement after that, and officials said President Bush (news - web sites) would set an election-year goal of halving the deficit over the next five years.


At $521 billion, the fiscal 2004 deficit would easily top the $374 billion shortfall posted in fiscal 2003.


It is also significantly higher than this week's Congressional Budget Office (news - web sites) deficit projection of $477 billion for fiscal 2004.


Fiscal conservatives warned Bush's newly enacted Medicare prescription drug plan would only add to the red ink.


In the fiscal 2005 budget he will send to Congress on Monday, Bush will estimate the 10-year price tag of the Medicare bill at $539 billion -- far more than initial projections of $400 billion.


Faced with a backlash from conservatives in his own party, Bush will propose limiting growth in spending outside defense and homeland security at about 0.5 percent -- far less than the rate of inflation.


Bush's plan could face stiff opposition from Republicans and Democrats alike.


Republican lawmakers, who will oversee the spending process, warned on Thursday the plan could mean painful cuts in programs ranging from veterans' health to medical research.

[Honeykiss1974]

Originally posted by CrimsonTide4
The White House will project that the federal budget deficit will peak this year at $521 billion, surpassing congressional estimates and shattering previous records, people familiar with the budget said on Thursday.

Dag, SHATTERING huh?

$521 BILLION!

[SummerChild]

Since we are in such a hole already, I don't really see the harm in giving 100 million to the homeless. What the heck, I don't think tht there's really a huge difference that we are going to feel between 521 million and 621 million in the hole. LOL

SC

[CrimsonTide4]

Deficits Force Widespread Cuts in Bush Budget
2 hours, 1 minute ago Add Top Stories - Reuters to My Yahoo!


By Adam Entous and Caren Bohan

WASHINGTON (Reuters) - President Bush (news - web sites) proposed on Monday cuts in more than 125 government programs in his $2.4 trillion election-year budget, but even fellow Republicans were skeptical he could meet his goals to reduce record federal deficits.


Reuters Photo



After inheriting a record surplus, Bush has overseen a dramatic worsening of the budget picture which is expected to yield a record $521 billion deficit this year. He hopes to improve his fiscal image before the November election by promising to reduce the deficit by a third next year and in half by 2007.


To get there, he is asking Congress to terminate 65 major programs and reduce another 63, reserving the bulk of new federal spending for homeland security and defense.


The White House still expects the budget shortfall to total $1.35 trillion through 2009 and government debt to rise from $8.1 trillion to $10.5 trillion, prompting warnings from Democrats that chronic deficits would crowd out private investment, drive up interest rates and slow economic growth.


"We went through a recession, we were attacked and we're fighting a war. These are high hurdles for a budget and for a country to overcome and yet we've overcome them," Bush said of his budget, which would cut funding for about half of the 15 Cabinet-level agencies.


He said he was "confident" his deficit targets would be met, but fiscal conservatives expressed doubts.


Already members of both parties are bracing for a bitter fight that could stretch through the campaign season and are questioning whether any budget deal can be reached.


The administration acknowledged its budget omitted expenses that will increase the deficit, including up to $50 billion in fiscal 2005 to keep U.S. troops in Iraq (news - web sites) and Afghanistan (news - web sites).


DEFENSE, HOMELAND SECURITY PRIORITIES


William Niskanen, head of the libertarian Cato Institute, called Bush's budget "wishful thinking." Rep. John Spratt (news, bio, voting record) of South Carolina, the ranking Democrat on the House Budget Committee, said it was "neither credible nor realistic."


In line with his campaign priorities, homeland security and the military will be the budget's biggest winners with rises of nearly 10 percent and 7 percent, respectively.


Defense contractors including Boeing Co. and Northrop Grumman Corp. stand to benefit as Bush's $401.7 billion military budget increases spending on missile defense and on modernizing the Army.


To placate conservatives threatening a revolt, growth of discretionary spending outside of homeland security and defense would be capped at 0.5 percent. Because that is well below the inflation rate, it amounts to a cut in domestic programs and the lowest growth since 1993.


Among the hardest hit were agriculture, transportation, environmental and small business programs. The deepest cut was a proposal halve discretionary spending at the General Services Administration.


Bush set the goal of bringing this year's record $521 billion shortfall down to $364 billion in fiscal 2005, to $241 billion in 2007 and then to $237 billion in 2009. There is no talk of surpluses in the foreseeable future.


ELECTION-YEAR FIGHT


Democrats scoffed at Bush's plan to stem the red ink while asking Congress to make permanent his tax cuts. "It's the most anti-family, anti-worker, anti-health care, anti-education budget in modern times, and it doesn't deserve to pass," said Sen. Edward Kennedy (news, bio, voting record), a Massachusetts Democrat.





Fiscal conservatives accused the White House of relying on gimmicks, like stretching the definition of homeland security to sidestep its own spending limits.

Even a spending freeze in areas targeted by Bush would cut the deficit by just $3 billion, according to some Republicans.

Conservatives want much deeper cuts after the White House acknowledged its prescription drug plan would cost one-third more than initially advertised. Spending under Bush has grown at the fastest pace since the Johnson administration of the mid-1960s, they complain.

Some conservatives are already urging Bush to veto costly highway and energy bills.

Bush put the onus on Congress to stick to his budget guidelines and his budget director, Joshua Bolten, said, "We do expect to take a firm line."

If so, Democrats warned of painful cuts in popular programs ranging from veterans' medical care to medical research and law enforcement.

The budget also assumes that $2.4 billion will be raised from leasing out part of Alaska's Arctic National Wildlife Refuge (news - web sites) for oil drilling, a proposal that went nowhere last year and that Democrats have vowed to block.

Some tax breaks favored by Republicans will also be reined in, including some for energy production and business investment.

As well, Bush will delay until after the election the budget-busting reform of the alternative minimum tax, which requires a growing number of middle-income taxpayers to calculate their taxes in two ways and pay the higher bill.




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Bush, Bush, Bush. . . what is we gon' do.