Posted on 10/14/2005 12:54:17 PM PDT by SierraWasp
U.S. deficit falls to $319 billion
By William L. Watts, MarketWatch Last Update: 3:33 PM ET Oct. 14, 2005
(This is an update to an earlier version of the story, correcting fiscal 2004 revenue and spending figures.)
WASHINGTON (MarketWatch) -- Citing a surge in tax revenues, the federal government on Friday posted a deficit of $319 billion in fiscal 2005, down $94 billion from the previous year's record.
Administration officials said the new Treasury figures vindicated President Bush's economic policies. Critics noted that deficits are expected to persist for years to come and that spending related to Hurricane Katrina is likely to drive up red ink significantly in the current fiscal year.
"Lower taxes and pro-growth economic policies have created millions of jobs and a growing economy has swelled tax revenues over the last year," said Treasury Secretary John Snow, in a printed statement.
The deficit was still the third-highest on record in dollar terms. Measured against the economy, the gap was equal to 2.6% of gross domestic product, above the 40-year average of 2.3%.
The data showed that receipts in fiscal 2005, which ended Sept. 30, totaled $2.154 trillion, up from $1.880 trillion the previous year. Spending also rose, with outlays totaling $2.473 trillion in fiscal 2005. Spending totaled $2.293 trillion in 2004.
A Treasury official said the fiscal 2005 budget figures included around $4 billion in hurricane-related spending, a small chunk of the more than $60 billion approved by Congress in the immediate wake of Hurricane Katrina. Most of that spending is expected to take place in fiscal 2006.
The size of the federal tab for the post-hurricane cleanup and rebuilding effort is yet to be determined. Some lawmakers have estimated the total bill could top $200 billion, while others have argued it's unlikely to be that high.
Regardless, analysts say the deficit is already likely to climb in fiscal 2006.
Analysts at Credit Suisse First Boston on Friday upped their estimate of the fiscal 2006 deficit by $30 billion, to $395 billion. They now see fiscal 2007 posting a deficit of $477 billion.
Lawmakers return Monday from a weeklong recess. The Senate and House are both scheduled this month to push legislation designed to wring around $35 billion in cuts in mandatory spending programs over the next five years.
Top Republicans have also said they will press ahead with measures designed to extend some of Bush's first-term tax cuts, which would reduce revenues by around $70 billion over the same period.
While conservative Republicans have pressed congressional leaders and the White House to offset hurricane-related expenditures with spending cuts, analysts expect little action on that front.
Economist Kathleen Stephansen of Credit Suisse First Boston argued in a research note that any savings wrung out of mandatory spending programs may be outstripped by larger-than-expected costs of measures already in the pipeline, such as the Medicare prescription-drug benefit that will be fully implemented in 2006.
The Bush administration the deficit will be reduced to $260 billion by fiscal 2009, fulfilling Bush's pledge to halve the gap from the White House's preliminary estimate of a $521 billion deficit in fiscal 2004. The White House's long-term projections, however, don't account for the ongoing costs of military operations in Iraq or Afghanistan and don't estimate total hurricane-related spending.
William L. Watts is a reporter for MarketWatch.
Dropping Deficit Ping Thing!!!
Excellent.
It could be better, however, I don't want a surplus either. A surplus means the government took way too much money in.. It should be a 0
It is basically good news, but whoopdie-frickin'-doo, we still have a huge deficit because the aholes in DC don't know how to control their drunken sailor spending ways. And that's on BOTH sides of the aisle, friends. Why are we celebrating this? We should accept it as basically good news, then go hold their feet to the fire where this deficit is concerned.
This will burn the dim's butts! They hate the Reagan way!
It's Bush's fault.....er, nevermind.
What the Bush admin. is practicing is NOT Reaganomics... tax cuts AND spending limits balance budgets. Reagan had to deal with a Democratic Congress - Repubs control everything now. And over $130B in war spending is off budget, as well as various Katrina costs...
You can't get away with predicting huge deficits and declaring victory because the real deficit wasn't as big as the imaginary one.
Don't want to rain on the parade (hopefully it doesn't), but does this include all of the money promised for hurricane and other disaster relief. The drop cited is indeed substantial and calls for a few well earned "I told you so's" to those who oppose tax relief.
If this keeps up we'll have a balanced budget in 3 years.
So, when will Bush pay back the $3 trillion dollars??? I gues s he'll be gone by then...
Somebody should check to see if the shysters are misclassifying money borrowed from China as "revenue".
Um, you should know better than to believe the government's word on its financial condition by now. All sorts of nice big expenses moved off the books can indeed make it look like the deficit is dropping, but it ain't.
We are at War, and deficits are normal during times of War. Having said that, I agree that pork needs to be cut!
LLS
Note: not "citing a reduction in spending" by so-called "limited government" Republicans.
Unless spending is cut, "tax cuts" are simply deferred higher taxes (with interest) in the form of debt dumped on future generations without their permission.
What part of war-fighting do the bridges to nowhere and the "free" pills for greedy geezers vote-buying scams achieve?
Must be no fat left to cut in the budget, as Tom DeLay says.
And we are always "at war", because war is the health of the state.
"$319 billion in fiscal 2005, down $94 billion from the previous year's record. "
That's down 25%, IN ONE YEAR!
Yah, quite a feat if one leaves > $100B simply off the page!
Good, now if Bush and his Republican buddies in Congress could just control their lust for spending...
Only $0.3 trillion in the hole and still three months to go. We should celebrate.
A billion here, a billion there, and pretty soon you're talking real money :)
Reaganomics is when the economy grows faster than the government, not the other way around.
The wars in total - Iraq, Afghanistan, increased base security around the world - have cost a total of $280-300B FY01 through FY05 inclusive.
For comparison, during that timeframe interest on the treasury bills with which yesterday's pork was paid for cost $1,700B.
Oh, the gnashing of teeth will commence immediately.
Doesn't seem possible since many 'conservatives' are convinced the President is bankrupting us.
Uh, this is a good thing?
"Only $319 billion"
Just wait till the Katrina spending gets appropriated. And the new pill entitlements kick in.
Sad what supposed Conservatives will tolerate.
Your complete resistance to knowledge of any kind is daunting.
(1) We don't borrow money from China.
(2) Treasury bonds are liabilities, not revenue, and are not classed as revenue.
Does anyone have the percentage of GDP compared to the deficit since Reagan? I used to have those numbers and as I remember, this is as low as we've been in years.
I don't think it will take that long. At the very least, the major parts of the dividend and income tax cuts which expire in 2009 and 2011 respectively will not be extended.
If the Dems can restrain themselves from nominating another unelectable moonbat, they will probably have the White House back by 2012 at the latest - and we will in all likelyhood get socialist healthcare with a 48% top income bracket to pay for it.
Go back to Mars.
Is it always raining where you are? Even on sunny days.
Seems I read somewhere (maybe someone can point me to a source) that most EUropean governments are running twice-to-three times the US deficit.... Seems that when we approach "their" deficits, they complain that "we" jeapordize the world's economic stability....
I agree. The spending (on pork) needs to stop (especially if we want true Reganonmics). An occasional veto would've been nice...
We ARE accepting it as good news and will "hold their feet to the fire" to cut more spending later. Can't do anything on a Friday. What's your problem with some of us woohooing a little good news? We've had precious little of it lately.
Chinda holds about 8% of US Treasury debt.
Yeah, how dare that nasty Bush spend our tax dollars on a war we didn't start and how dare he do anything to rebuild after Katrina?!?!?!?
Wail....my stock is down ($00.32 ) !
You are correct. War and natural disaster recovery costs are hardly informative about the year to year gov't spending.
It must drive the Left crazy that reducing taxes actually increases tax revenue!
Yeah - that's great news! /sarc
They only get to that number by conveniently borrowing the off-budget surpluses of approx $176 billion and not reporting a cent of it. Count that in and the deficit dropped only about $60 billion, all the way down to $500 billion or so. And that's not even accounting for the future spending of promises made now, such as medicare prescription drug benefits, which we should be saving for now to pay for later rather than forcing our children to pay for that benefit in 30 years.
Anyway, if you just count the raiding of off-budget surpluses, the deficit isn't projected to drop below $480 billion anytime in the next 10 years if W gets his way. If you let tax cuts expire, the projection is a $183 billion deficit in 2015.
Thats still horrendously bad, folks. Tax reductions ***ONLY*** work with equivalent cuts in spending, tax hikes elsewhere, or when they mask a general simplification of the tax code.... They don't work when you increase spending faster than LBJ at the same time.
spending related to Hurricane Katrina [and the idiotic refusal of Republican leaders to cut even a dime of pork to pay for it] is likely to drive up red ink</p>
Money borrowed from CHINA?
Its Bush's fault!!!
It's like conservatives are under a spell. They just can't see this.
$2 trillion. When the Fed budget went over $1 million many were alarmed. What is Fed debt now? We might have to annex China or whatever region is still in the black, if there is one on earth, so we have some help paying this off.
You are severely misinformed.
Since 2000, the percentage of U.S. public debt owed to foreigners has doubled. As of July, foreigners held just over $2 trillion, or 44 percent, of federal public debt outstanding. Japan alone now holds more than $680 billion; China, $242 billion; United Kingdom, $160 billion; and Caribbean Banking Centers, $103 billion (U.S. Department of the Treasury).
Source: America’s Foreign Owners
There is plenty of pork being flying out of D.C. - and yes, some of that is going into wasteful contracts to Iraq and NO - Iraqis rebuilt Iraq after the first Gulf War, there should be 100% employment of Iraqis now, not contractors getting paid $300K/yr to do the kind of things soldiers did for a small fraction of that pay. Unemployment there only feeds the insurgency.
If we can't get it together under complete Repub rule to get the budget under control and to cut the social welfare state (and yes, I'll include some corporations feasting at the public trough in this) then when is the budget EVER going to get balanced?
Yep, see #47.
Sounds like we need more tax cuts for the "rich"!
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