Posted on 05/08/2004 9:26:33 PM PDT by TheEaglehasLanded
Budget Office Lower Deficit Prediction
Friday May 7, 2004 8:46 PM
By ALAN FRAM
Associated Press Writer
WASHINGTON (AP) - The Congressional Budget Office says it believes its March projection for a federal deficit of $477 billion this year was too high, though the red ink still seems all but certain to set a new record.
The budget office, Congress' nonpartisan fiscal analyst, provided no new figure and won't formally update its estimate until summer. Nonetheless, the improved outlook paralleled Wall Street firms that have revised their forecasts for the better, marking the first time in several years that experts are saying their earlier estimates were too gloomy.
Last year's $374 billion deficit stands as the worst ever in dollar terms.
The lower projection, prompted mostly by higher than expected federal revenues, means mixed election-year news for President Bush. Though this year's shortfall will be better than envisioned earlier, Bush will still have presided over huge and growing deficits each of his three years in office following four straight annual surpluses under President Clinton.
Sen. Kent Conrad of North Dakota, top Democrat on the Senate Budget Committee, said Bush caused a ``fiscal disaster'' by the tax cuts he has won.
``If anything, the deficit estimates we are seeing today highlight the stunning failure of President Bush's fiscal leadership,'' Conrad said in a written statement.
Republicans cited the improved forecast - along with Friday's report of job growth - as evidence of exactly the opposite.
``This is welcome news that the tax reduction that the president pushed and we passed last year is working,'' Senate Budget Chairman Don Nickles, R-Okla., said in written comments. ``Jobs are up, the stock market is up, revenues are up, and the deficit is declining.''
Through the first seven months of the government's budget year, the deficit is already at $284 billion, the budget office said. That is $82 billion worse than the same period last year.
``Although the deficit will widen as the year goes on, recent trends suggest that the deficit in 2004 will be less than the $477 billion that CBO projected in March,'' said the report, which was issued on Thursday.
The budget office said revenues are running $30 billion to $40 billion over its earlier expectations, including stronger than expected collections of individual and corporate taxes.
Private budget analysts have also begun edging their budget forecasts downward, though they remain in record-setting territory.
Jim Glassman, senior economist for J.P. Morgan and Co., said his estimate for this year's deficit has fallen from $475 billion to $450 billion. Susan Hering, senior economist for the investment bank UBS, said she has made the same reduction.
Ethan Harris, chief U.S. economist for Lehman Bros., said he dropped his projected deficit for 2004 by $30 billion Friday to $445 billion. And Christopher Wiegand, economist for Citigroup Inc., said he is projecting a $370 billion deficit this year, down from a $470 billion estimate in January.
The White House's last deficit forecast, made in February, was for $521 billion. It will issue a new one this summer.
Democrats have accused the administration of making an artificially high projection so it can claim credit for an improvement when the final numbers come in. White House officials have denied that.
The longer-term budget picture remains a looming crisis because the huge baby boom generation will begin drawing Social Security and Medicare benefits in a few years. In a speech on Thursday, Federal Reserve Chairman Alan Greenspan called the fiscal problems ``a significant obstacle to long-term stability.''
Also Monsoor Ijaz testified in front of 9/11 commission, didn't even know he was testifying yesterday.
This is proof that lowering taxes will result in more revenue into the federal treasury. Reagan proved it in the 80's and Dubya is doing so again. In fact, I wouldn't be surprised if these numbers aren't revised again before mid summer. I believe the deficit will be cut in half before November.
We are on a pace to see at least 2.5 million jobs come back into the Corporate payroll reports, and that doesn't even take into account of the Household payroll reports. I read somewhere that new Small business starts are way up, and almost every sector of this economy is either growing at a higher rate than expected and several sectors are reflecting that the economy is growing at record rates
TDIDS for sure
We wont have to worry about that possibility, because the American people will get to know John Kerry long before November, and as they do, his poll numbers will continue to spiral downward, it will just be at a much faster pace once they get to know him.
John Kerry has to be the most boring and unqualified candidate since Walter Mondale. The only time Mondale was exciting was when he announced his running mate Geraldine Ferraro. The buzz at the time was to what degree of a landslide would Ronald Reagan & George H.W. Bush would win by :-)
You have to be kidding.
The economy is supposedly doing great, and the gov't is going to run up the debt by another half-trillion dollars.
What do you think will happen when the ecomony goes belly up again?
Or when social security stops running a surplus (around 2009, I beleive)?
Or when the full costs of the Bush medicare plan are realized?
Or when wages continue to decline due to so-called 'free trade', thus resulting in lower tax revenues?
Or when even more money is required for Iraq?
Don't hold your breath. The tax cuts were very small, and more oriented towards removing low-income folks from the tax rolls than from producing growth.
I suspect there will be a slight increase in tax revenues as we saw during the 80s (although on a smaller scale), but it will be dwarfed by the massive spending increases.
Also, one has to wonder how long the economy will continue to do well with $2 gas.
People said the same thing about Gore. He was losing to Bush by 15 points early in 2000, and then wound up getting more votes. And they weren't voting 'for' Gore; rather against Bush.
I suspect it won't be much different this time around. The fact of the matter is that the American people really don't care for either candidate (just like in 1992, 1996, and 2000), and the race will be determined by who they dislike the most.
I would be very surprised if either candidate gets over 50% of the popular vote.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.