Text 14605, 100 rader
Skriven 2005-08-15 21:44:00 av Jeff Binkley (1:226/600)
Ärende: Prediction
==================
This I have predicted.  Don't be surprised if next year's number comes 
in closer to $250B or less...  The stock market should rally in Q4 of 
this year to an all time Dow high, unless the tax cuts are not renewed.

======================================

http://biz.yahoo.com/ap/050815/budget_deficit.html?.v=7

AP
CBO Predicts Drop in Budget Deficit
Monday August 15, 5:41 pm ET 
By Andrew Taylor, Associated Press Writer  

Congressional Budget Office Projects Budget Deficit Will Drop to $331 
Billion 


WASHINGTON (AP) -- The federal budget-deficit picture turned brighter 
Monday as congressional scorekeepers released new estimates showing the 
level of red ink for the current fiscal year would drop to $331 billion.

 
 
The new report by the nonpartisan Congressional Budget Office, which 
does budget analysis for lawmakers in Washington, gave the latest proof 
that surging revenues and a steadily growing economy are combining to 
bring the deficit down from a record $412 billion posted last year. CBO 
predicts a $314 billion deficit for the budget year starting Oct. 1.

The report is welcome news for President Bush, who has seen the budget 
situation during his tenure deteriorate markedly from predictions of 
unending surpluses when he took office in January 2001.

"The CBO report confirms the dramatic improvement in the 2005 deficit 
picture that the Administration reported last month," said Scott Milburn 
a spokesman for the White House budget office. "A strong economy fueled 
by tax relief is generating stronger-than-projected revenues."

The White House foresees a $333 billion deficit for the year that's 
about to end and a $341 billion deficit for next year.

Last year's deficit was a record in dollar terms, though many previous 
deficits in the mid-1980s and early 1990s were larger when measured 
against the size of the economy. The White House and most economists say 
that the more relevant measure of the deficit is to weigh it against the 
size of the economy. Measured that way, the latest estimates for this 
year are slightly worse than recent historic averages.

But Democrats on Capitol Hill were quick to issue warnings about the 
long-term deficit picture, which will worsen considerably after the Baby 
Boom generation starts retiring in large numbers after the turn of the 
decade.

"While this years deficit will be lower than last year's record 
shortfall, the improvement is likely to be short-lived. Declarations of 
victory over budget deficits only distract from the disturbing long-term 
budget outlook," said Kent Conrad of North Dakota, top Democrat on the 
Senate Budget Committee.

Unlike White House estimates released last month, CBO assumes that 
Bush's tax cuts are allowed to lapse at the end of the decade. Most of 
the cuts in Bush's signature $1.35 trillion tax relief law enacted in 
2001 expire by 2010, but many lawmakers and the White House assume that 
they will be renewed by then.

Even if the tax cuts were allowed to expire, the budget would still stay 
in the red through the full 10 years covered by CBO's report.

If the tax cuts are renewed, the deficit picture would worsen by $204 
billion in 2011 -- to perhaps $327 billion or so. By 2015, the cost of 
extending the 2001 and subsequent tax cuts would reach $432 billion.

By CBO's scorekeeping rules, the agency must also assume that the costs 
of occupying Iraq and Afghanistan will stay at current levels, which 
probably inflates long-term projections. Congress in May passed an $82 
billion measure to provide more war funding, and CBO must assume 
spending would continue at that rate.

The projection for the deficit at the end of the current budget year on 
Sept. 30 remains far worse than when Bush took office. At that time, 
both White House and congressional forecasters projected cumulative 
surpluses of $5.6 trillion over the subsequent decade.

Instead, deficits returned three years ago after four years of budget 
surpluses. The chief reason was that forecasters assumed that a surge in 
revenue in the late 1990s -- fueled in large measure by the stock market 
boom -- would continue.

The economy hit a recession, the market tumbled and a surge in homeland 
security spending after the Sept. 11, 2001 terror attacks combined to 
produce a return to deficits.

In early 2004, Bush said his goal was to cut the deficit in half in five 
years. Then, the White House forecast the deficit to be $521 billion for 
the 2004 budget year, and the president said his goal was to see that 
halved, to about $260 billion by 2009.


--- PCBoard (R) v15.3/M 10
 * Origin:  (1:226/600)