The Budget and Economic Outlook: An Update, August 2007 (pdf)
The Budget and Economic Outlook: An Update, August 2007 (data)
The Budget and Economic Outlook: An Update, August 2007 (charts)
Posted on 08/27/2007 2:31:37 AM PDT by fabrizio
"Today's deficit estimate release by the Congressional Budget Office is good news for American taxpayers. Like the estimates put forward by the Office of Management and Budget, it shows that our government is on a path to meeting the goal I set forth of putting the budget into surplus by 2012. Balancing the budget requires keeping the economy strong, keeping tax rates low, and keeping spending in check.
Through tax relief, we cut taxes for American families and reduced tax rates on dividends and capital gains -- energizing small businesses to invest and expand. And since we lowered these important tax rates, the economy has created more than 8 million jobs, increased wages, and grew tax revenues that will lead to a surplus.
Continued spending restraint is a critical element for accomplishing a balanced budget. I again urge Congress to pass spending bills by the end of the fiscal year, without wasteful earmarks, without raising taxes, and in regular order - one at a time, and on time. Congress has an opportunity to rise to the occasion and work with my Administration to accomplish a balanced budget without raising taxes, and I hope they will do so upon their return to Washington in September."
The Budget and Economic Outlook: An Update, August 2007 (pdf)
The Budget and Economic Outlook: An Update, August 2007 (data)
The Budget and Economic Outlook: An Update, August 2007 (charts)
And if they don't, will he use the veto?
Disgusting.
Bush and the GOP handed the Dems the opportunity to win the White House in 2008 through irresponsible governance of the federal purse and neglect of the Conservative base.
Bush also failed to groom a successor, leaving the party reeling.
Imagine IF a Dem wins in 2008. They will raise taxes, creating a potential short-term surplus, just enough to teach a whole new generation of Americans that Dems are better at balancing the budget - UNBELIEVABLE!
Drugs for seniors was NOT worth it, fools!
Wars cost money. So does rebuilding entire cities. Blaming it all on drugs for seniors is ridiculous.
and you think facts are going to deprive Bush-bashers of the sadomaso pleasure of attacking a fine gentleman and a great president with arguments that make Nancy Pelosi and the NYT sound almost intellectually honest, at least they don’t claim to be conservatives?
If Dubya walked on water, they’d yell “he can’t swim! He’s not a real conservative!” And should he heal a blind man with the sole touch of his hands they’d say he’s ruining ophtalmologists and the eye glasses industry. And when this attitude and 8 years of RINOs failing to support the President in Congress results in a victory for Hitlery Clinton they will still blame Bush, and with the help of the pro-terrorist media.
The CBO is still cooking the books, on orders from Congress, and agreed with by the Executive. Social Security and few other items are ‘off-budget’, so they don’t get counted toward the publicly announced deficit or so-called surplus.
To get a more true picture, look at the debt, which continues to increase daily. Social Security will need to be pumped up before 2012, so this current report by the President is a sham.
It is a humorless joke.
Read my fantasy GOP press release:
Despite 9/11, a recession inherited from Clinton, two on-going wars, Bush and the GOP Congress managed to achieve a budget surplus.
Bush and the GOP squandered this remarkable opportunity on domestic programs nobody wanted.
And more importantly, that offend the Conservative base.
Wars and borders we understand, support and willingly fund - Socialist programs and political pork we do not.
To get a more true picture, look at the debt, which continues to increase daily. Social Security will need to be pumped up before 2012, so this current report by the President is a sham.
It is a humorless joke.
Agreed. The following graph shows a number of projections from the CBO report:
The actual numbers are at http://home.att.net/~rdavis2/cbobud07.html. As can be seen, the on-budget deficit, which excludes the surplus borrowed from the Social Security trust fund, is projected to be $339 billion, over twice as large as the reported deficit of $158 billion. If all trust fund surpluses are excluded, the deficit is projected to be $448 billion, nearly three times as large.
In any event, the reported deficit is projected to increase through 2010 and then decrease rapidly, becoming a surplus in 2012. However, that assumes that all of Bush's tax cuts expire as they are scheduled to under current law. If those tax cuts are extended as Bush proposes, the reported deficit is projected to continue growing, reaching a half-trillion dollars per year by 2017. Excluding all trust fund surpluses, it will reach $894 billion per year by 2017. More importantly, the gross federal debt is projected to rise to nearly $20 trillion, increasing from the current 64.7% of GDP to 91.5% of GDP. The projected "surplus" that Bush speaks about in 2012 is a scam.
It's all about relativity doncha know.
AFAIK, Debt Service is off budget as well.
LOL.
That’s akin to: “But ma, all the other kids are doing it.”
See remember’s post #8.
I believe that interest paid on the "debt held by the public" is on budget. However, you are correct that all of the interest paid on the debt held by Social Security and the other trust funds is off budget. In effect, the government pays the trust funds interest but immediately borrows it all back off budget. Pretty slick, huh?
By the way, there was an incorrect statement in my prior post. The gross federal debt is projected to rise to $16.7 trillion (not nearly $20 trillion), increasing from the current 64.7% of GDP to 77.4% (not 91.5%) of GDP. Still, 77.4% of GDP will put the gross federal debt at its highest level since 1951.
They might still explain why, during periods in the mid 90s when both Congress and the Clinton administration were claiming we had a surplus, the debt kept increasing every month, every day, according to the Treasury.
I thought it was because debt service was off-budget. (I haven’t been able to find a line item in the budget for that.)
Indeed it is but the fact remains that it is true that the deficit as figured today is lower then it was as figured in the past 3 years using the same criteria.
That’s true, but the numbers for many years now have been false, because of the reasons mentioned. Fedgov has taken monstrous amounts of money off budget, in an attempt to deceive the American public and the rest of the world.
Because of all that, the budget report is a lie, and this report is as much of a lie as past reports. In that narrow regard, Bush is no improvement from the previous administration. Sad shame.
I thought it was because debt service was off-budget. (I haven’t been able to find a line item in the budget for that.)
No, the chief reason is because the general fund is borrowing the Social Security surpluses (raiding the so-called 'lockbox') and surpluses from other trust funds. This borrowing is correctly accounted for in the gross federal debt, the debt that is now almost $9 trillion. However, it is not accounted for in the "unified deficit". The following graph shows various measures of the deficit.
The actual numbers and sources are at http://home.att.net/~rdavis2/def08.html. The purple line is the "unified deficit" and is equal to all revenues minus all outlays. These revenues and outlays include the general fund and the trust funds. The blue line is the change in the debt held by the public and is very nearly equal to the unified deficit. The green line is equal to the public deficit minus the Social Security surpluses that are borrowed by the general fund. Finally, the red line is the change in the gross federal debt which is equal to the public deficit minus the surpluses that are borrowed from all of the trust funds. As stated, this is the debt that is now almost $9 trillion.
As can be seen in the graph, the unified deficit did become a surplus in 1998 through 2001. However, the "gross deficit" never did become positive though it came very close in 2000. Since the "gross deficit" is the change in the gross federal debt, this debt continued to increase every year.
The following table shows the money that has been borrowed from the trust funds. As can be seen, $309 billion was borrowed in 2006 and the total holding at the end of 2008 is projected to reach $4.2 trillion. This money is all "off-budget" in the sense that it doesn't show up in the unified deficit figures that are reported every year but do show up in the gross federal debt.
DEBT HELD BY GOVERNMENT ACCOUNTS (billions of dollars)
Investment or disinvestment Holdings
----------------------------- end of
2006 % of 2007 2008 2008 % of
Description actual total est. est. est. total
---------------------------------- ------ ----- ------ ------ ------- -----
Old-age and survivors trust fund.. 177.0 57.2 180.2 203.6 2176.9 51.5
Civil service retirement & disabil 29.2 9.4 9.3 30.1 729.4 17.2
Hospital insurance trust fund..... 24.9 8.1 11.9 3.3 317.4 7.5
Military retirement trust fund.... 4.5 1.5 27.1 7.6 216.5 5.1
Disability insurance trust fund... 8.9 2.9 4.2 5.7 212.0 5.0
Medicare-eligible retiree health.. 19.9 6.4 23.5 24.1 120.3 2.8
Unemployment trust fund........... 11.4 3.7 12.8 12.0 91.0 2.2
Federal Deposit Insurance Corp.... 1.1 0.3 1.8 2.9 53.9 1.3
Employees life ins & health benfts 4.1 1.3 3.0 2.4 51.4 1.2
Supplementary medical insurance... 15.9 5.1 8.8 6.3 48.2 1.1
Postal Service retiree health fund 0.0 0.0 31.4 6.9 38.2 0.9
Housing and Urban Development..... -0.2 -0.1 -0.3 0.6 30.7 0.7
Nuclear waste disposal fund....... 1.0 0.3 0.1 0.9 19.7 0.5
Highway and Airport trust funds... 0.6 0.2 1.5 -1.8 18.6 0.4
Exchange stabilization fund....... 0.5 0.2 0.3 0.4 16.4 0.4
Foreign service retirement & disab 0.5 0.2 -0.5 0.1 13.5 0.3
Other government accounts......... 10.1 3.2 -12.8 0.6 75.9 1.8
---------------------------------- ------- ----- ------ ------ ------- -----
Total investment in Federal debt.. 309.3 100.0 302.1 305.6 4230.1 100.0
Source: Budget of the United States Government, FY 2008,
Analytical Perspectives, page 230, table 16-4
Interesting.
So what explains why, in years when Congress & the Clinton administration claimed we ran a surplus, the debt as reported by Treasury (http://www.treasurydirect.gov/NP/BPDLogin?application=np) continued to rise every month?
And have you been able to find the line item(s) in the Budget that shows the debt service payment(s)?
So what explains why, in years when Congress & the Clinton administration claimed we ran a surplus, the debt as reported by Treasury ( http://www.treasurydirect.gov/NP/BPDLogin?application=np) continued to rise every month?
Yes, in fact I noticed that your link contains a link to this page from which comes the following excerpt:
What is the difference between the debt and the deficit?
The deficit is the fiscal year difference between what the United States Government (Government) takes in from taxes and other revenues, called receipts, and the amount of money the Government spends, called outlays. The items included in the deficit are considered either on-budget or off-budget.
You can think of the total debt as accumulated deficits plus accumulated off-budget surpluses. The on-budget deficits require the U.S. Treasury to borrow money to raise cash needed to keep the Government operating. We borrow the money by selling securities like Treasury bills, notes, bonds and savings bonds to the public.
The Treasury securities issued to the public and to the Government Trust Funds (Intragovernmental Holdings) then become part of the total debt.
Hence, the total debt consists of Treasury securities issued to the public to fund the on-budget deficits and Treasury securities issued to the Government Trust Funds in exchange for the monies that the general fund borrows from them.
And have you been able to find the line item(s) in the Budget that shows the debt service payment(s)?
Yes, you can find it listed as Function 900 in Table 3.2 of the Historical Tables. Following is an excerpt from page 72:
Table 3.2—OUTLAYS BY FUNCTION AND SUBFUNCTION (millions of dollars)
Function and Subfunction 2005 2006
------------------------------------------------- -------- --------
900 Net interest:
901 Interest on Treasury debt securities (gross) 352,345 405,866
902 Interest received by on-budget trust funds –69,153 –71,574
903 Interest received by off-budget trust funds –91,836 –97,722
908 Other interest ........................... –3,945 –7,306
909 Other investment income .................. –3,425 –2,661
-------- --------
Total, Net interest .......................... 183,986 226,603
-------- --------
(On-budget) ................................ (275,822) (324,325)
(Off-budget) ............................... (–91,836) (–97,722)
Source: Budget of the United States Government, FY 2008, Historical Tables,
tables 3.1 and 10.1
As can be seen, it lists the "Net interest" for 2006 to have been $226.6 billion. However, note that this equals the gross interest on Treasury debt securities (#901), minus the interest paid to the trust funds (#902 and #903), minus a small amount of other interest and investment income (#908 and #909). Hence, as I mentioned in my prior message, they are not counting interest paid to the trust funds. By the way, "on-budget trust funds" refer to just the Social Security trust fund and "off-budget trust funds" refer to all other trust funds.
In another country...
Oops, I should have reversed that. "Off-budget trust funds" refer to just the Social Security trust fund and "on-budget trust funds" refer to all other trust funds. You can verify that on page 297 of the Historical Tables that lists the interest for the Old age and survivors insurance fund and Disability insurance trust fund to be $87,316 million and $10,406 million, respectively. Those add up to $97,722 million, the total for off-budget trust funds.
By the way, the source of the excerpt from page 72 is table 3.2, of course, not table 3.1 and 10.1 as marked.
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