Skip to comments.Washington Shelved Report of Deficit
Posted on 05/29/2003 9:57:58 AM PDT by DoctorMichael
Washington Shelved Report of Deficit
(AFP) - In the midst of negotiating a steep tax cuts package, the US government shelved a report that showed the United States faces future federal budget deficits of more than 44.2 trillion dollars.
President George W. Bush's administration chose to keep the findings -- commissioned by then-Treasury secretary Paul O'Neill -- out of the 2004 annual budget report, published in February, London's Financial Times reported.
The newspaper desribed the study as "the most comprehensive assessment of how the US government is at risk of being overwhelmed by the 'baby boom' generation's future healthcare and retirement costs."
The Financial Times hinted that the decision not to publish the report may have been because the White House was campaigning for a massive tax-cut package that critics claim will expand future deficits.
The study, according to the same source, said that sharp tax increases, massive spending cuts or both are unavoidable if the US is to meet benefit promises to future generations.
"It estimates that closing the gap would require the equivalent of an immediate and permanent 66 percent across-the-board income tax increase," the Financial Times said.
"The study was being circulated as an independent working paper among Washington think-tanks as Bush on Wednesday signed into law a 10-year, 350-billion-dollar tax-cut package he welcomed as a victory for hard-working Americans and the economy," the newspaper said.
Kent Smetters, then-Treasury deputy assistant secretary for economic policy, and Jagdessh Gokhale, then a consultant to the Treasury, were in charge of the analysis, the newspaper said.
"When we were conducting the study, my impression was that it was slated to appear (in the budget). At some point, the momentum builds and you think everything is a go, and then the decision came down that we weren't part of the prospective budget," Gokhale was quoted a saying in the front-page article.
O'Neill, who was fired last December, refused to comment, according to the same source.
The Bush administration has come under severe criticism for the tax cuts package, which come on top of a 10-year 1.65 trillion tax cut program enacted in 2001, at a time when the US economy is sputtering and unemployment is steadily rising.
And if you beleive these numbers, what difference is $350 billion going to make???
THAT's a sign of true "leadership"!!!
Why? Government isn't responsible for healthcare and retirement costs. Please ask London Financial Times to look through the US Constitution for the Clause that states that government is responsible for these 2 things? Do most people realize that the US government could terminate Social Security at any point and the contributors would never see a dime? How about those people that pay into Social Security for 40 years, retire, then die 1 month after retiring. Are they getting their "FAIR SHARE" back? How about inheritance for their children? Nope...40 years of work evaporates into government income redistribution programs.
Agreed. Not much.
I think it again boils down to "Dynamic versus Static" computation of the projected numbers that go out far enough as to be unreliable and unrealistic.
However, I wish there was a bit more budget CUTTING in the latest budget though.............ala Rush's first hour yesterday, that I thought of starting a Vanity Thread on.
And, actually, it's from a U.S. Treasury Dept. commissioned report headed by Kent Smetters, at the time Treasury deputy assistant secretary for economic policy, and Jagdessh Gokhale, then a consultant to the US Treasury and now Federal Reserve economist.
The Financial Times simply reported the findings..
Or Did the same guys that helped Paul Erlich work out the end of food by 1990 work as ghost writers with the help of JB at the Times? This is a joke.
Shhhh! Don't say that too loud. Many think deficit spending is a wonderful thing, and without consequences. Some of these profligates call themselves "conservatives," ironically.
Bush said that he was willing to sign a bill that included the credit for people on Income Tax Welfare, but he didn't get one.
Looks like a few conservatives are still awake in Congress.
I wonder if this was the real reason O'Neill was let go - because he was the one who commissioned this report.