Budget Office Deepens Fiscal Gloom for Bush

[papau]

http://www.nytimes.com/reuters/politics/politics-budget-congress.html

Budget Office Deepens Fiscal Gloom for Bush By REUTERS
Filed at 0:25 a.m. ET

WASHINGTON (Reuters) - <snip> But it also said next year's budget shortfall would rise by $21 billion, to $362 billion, and forecast a cumulative deficit of almost $2.4 trillion between 2004 and 2013 -- up sharply from its prior forecast of $1.4 trillion over the same period.

The added red ink comes despite expected robust growth of 4.8 percent this year and 4.2 percent in 2005 -- with the benefits of economic recovery outweighed by increased federal spending, like the $400 billion Medicare drug benefit and $87 billion Iraq war package Congress approved late last year.

<snip>

Bush's critics say allowing deficits to grow unchecked will leave the United States ill prepared to cope with the impending retirement of the baby boom generation and that massive federal borrowing will eventually lead to higher interest rates.<snip>

If all the cuts are extended, the CBO notes, the 10-year cumulative deficit would balloon to almost $4 trillion.

The forecast also does not factor in even modest reform of the ever-expanding reach of the Alternative Minimum Tax, which both parties concede will soon become politically imperative and which is expected to cost at least $400 billion.

[Homer12]

1. It's like watching a part of your body being amputated...

....against your will, as others watch, but nobody will do anything to stop it.

Frustrating that people are allowing Buscho to destroy government so they can destroy social programs while spend on defense.

Crony Capatalism with a Grover Norquist twist, how creative.

[sallyseven]

2. destroying SS has been on the

agenda since bush took office..Gingrich had already put in motion the opportunity to allow SS and Medicare to whither on the vine The second to get Saddam. the third to make lost of money for his friends.

[papau]

3. Krugman thinks anew that the Bush tax cuts caused the record deficit

http://www.nytimes.com/2004/01/27/opinion/27KRUG.html

<snip> The main reason for deficits, however, is that revenues have plunged. Federal tax receipts as a share of national income are now at their lowest level since 1950.Of course, most people don't feel that their taxes have fallen sharply. And they're right: taxes that fall mainly on middle-income Americans, like the payroll tax, are still near historic highs. The decline in revenue has come almost entirely from taxes that are mostly paid by the richest 5 percent of families: the personal income tax and the corporate profits tax. These taxes combined now take a smaller share of national income than in any year since World War II.

This decline in tax collections from the wealthy is partly the result of the Bush tax cuts, which account for more than half of this year's projected deficit. But it also probably reflects an epidemic of tax avoidance and evasion. Everyone who wants to understand what's happening to the tax system should read "Perfectly Legal," the new book by David Cay Johnston, The Times's tax reporter, who shows how ideologues have made America safe for wealthy people who don't feel like paying taxes.

I was particularly struck by Mr. Johnston's description of the carefully staged Senate Finance Committee hearings in 1997-1998. Senators Trent Lott and Frank Murkowski accused the I.R.S. of "Gestapo"-like tactics, and Congress passed new rules that severely restricted the I.R.S.'s ability to investigate suspected tax evaders. Only later, when the cameras were no longer rolling, did it become clear that the whole thing was a con. Most of the charges weren't true, and there was good reason to believe that the star witness, who dramatically described how I.R.S. agents had humiliated him, really was engaged in major-league tax evasion (he eventually paid $23 million, insisting he had done no wrong).<snip>


So the right has used deceptive salesmanship to undermine tax enforcement and push through upper-income tax cuts. And now that deficits have emerged, the right insists that they are the result of runaway spending, which must be curbed. <snip>

[54anickel]

5. Krugman seems to be right on, again. Thanks for posting n/t

[DrZhivago]

4. what upsets me

Is that they kept referring to "non Homeland Security" spending as if Homeland Security (which includes all the pork included in defense spending) is an untouchable expense. So Republican'ts (who are all of the sudden worried about spending) are left to cut spending elsewhere. And yet they are convinced the economy is on the up and up. But what they don't realize is that economing is somewhat on the up and up despite of them not because of them.