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GOP budgets may not match promises-Analysis- would inflate future deficits

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papau Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Apr-07-04 10:39 AM
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GOP budgets may not match promises-Analysis- would inflate future deficits
Edited on Wed Apr-07-04 10:39 AM by papau
http://www.usatoday.com/usatonline/20040407/6089059s.ht...

GOP budgets may not match promises Analysis: Plans would inflate future deficits By Peronet Despeignes USA TODAY


Republican leaders in Washington say they're committed to reducing the federal budget deficit and will cut it in half, but an analysis suggests their plans would actually make the deficit bigger than if Congress and the White House simply did nothing.

The White House and Republican-controlled House of Representatives and Senate have offered budget proposals that inflate the deficit over the next five years by $179 billion to $294 billion compared with the deficit forecast by congressional budget analysts.

The Congressional Budget Office (CBO), the non-partisan agency that analyzes budgets for Congress, projected in January that the deficit over the next five years would total about $1.1 trillion. That assumes the economy improves and temporary tax cuts phase out on schedule. But GOP budget proposals, which call for extending the tax cuts and increasing some spending substantially, would generate a five-year deficit of as much as $1.3 trillion or more.

Those numbers -- all of which exclude spending for Iraq -- almost certainly understate the deficit gap. The White House didn't include spending for Iraq in its 2005-09 budget, even though the United States is likely to spend billions more during that period to stabilize that nation, money that will almost certainly make the deficit even bigger.

To enable a comparison with the White House's budget, analysts at the liberal-leaning Center on Budget and Policy Priorities recalculated House, Senate and CBO figures to strip out the Iraq money included in those budget projections. The comparison shows all three Republican budget proposals make the future deficit bigger than the CBO's by increasing spending faster than inflation and extending tax cuts that are due to begin expiring this year -- without new spending cuts or tax increases to make up the difference.<snip>

Their (GOP deficit cut) pledge depends on a more than 40% jump in tax receipts between now and 2009 -- which would be the biggest since 1980-85, when the economy roared back from its worst slump since the Great Depression. So far, the recovery from the much-milder 2001 recession has produced little revenue growth.NOTE THAT THEY DO NOT INFLATION ADJUST THE SO CALLED INCREASE IN TAX RECEIPTS

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