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washingtonpost.com
White House Foresees 5-Year Debt Increase Of $1.9 Trillion

By Jonathan Weisman
Washington Post Staff Writer
Wednesday, July 16, 2003; Page A01


The federal government will pile up $1.9 trillion in new debt over the
next five years and will still be running an annual deficit of $226
billion by 2008, long after White House economists assume current war
costs will have subsided and the economy will have recovered, the Bush
administration projected yesterday.

The White House Office of Management and Budget officially pegged the
2003 budget deficit at a record $455 billion, up sharply from $158
billion in the fiscal year that ended Sept. 30, 2002. It is expected
to rise to $475 billion in fiscal 2004, even without additional costs
for the occupation of Iraq. The deficit is then expected to dip
swiftly to $213 billion in 2007 before rising again in 2008, the last
year of the White House forecast.

White House budget director Joshua B. Bolten labeled the new deficit
figures "a legitimate subject of concern," but he called the red ink
"manageable." He offered no new proposals to bring the budget back
into balance.

"Restoring a balanced budget is an important priority for this
administration," he said, "but a balanced budget is not a higher
priority than winning the global war on terror, protecting the
American homeland, or restoring economic growth and job creation."

Bolten, offering his first deficit projections since taking over as
budget director last month, would not concede a point private budget
experts have been making for months: Absent significant budget cuts or
tax increases, the deficit is now built into the fabric of the
government's finances and is here to stay.

"We are truly in a structural deficit as it's usually defined," said
Rudolph G. Penner, a Republican and former director of the
Congressional Budget Office, "and this is not going to right itself."

There has been a dramatic reversal of the government's fiscal fortunes
since President Bush took office in 2001. That year, the government
posted a $127 billion surplus, and the CBO projected surpluses between
2003 and 2008 totaling $2.9 trillion. That means projections have shot
downward by $4.8 trillion.

Just what caused that erosion is the subject of fierce partisan
debate. The White House pinned the blame on three years of sluggish
economic growth and the aftermath of the Sept. 11, 2001, terrorist
attacks. During Bush's first months in office, the White House
projected a $334 billion surplus for 2003. Of the $789 billion swing
to a $455 billion deficit, Bolten attributed 53 percent to the
economic downturn, 24 percent to war, homeland security and other new
programs, and 23 percent to the three successive tax cuts enacted
since 2001.

Republicans said the tax cuts will boost economic growth and
ultimately shrink the deficit. "The tax cuts proposed by the president
and enacted by Congress are not the problem," Bolten said. "They are
and will be part of the solution."

Democrats disagree. Between 2002 and 2011, the government will have
racked up $3.6 trillion in deficits, House Budget Committee Democratic
aides project. During the same time, Bush-era tax cuts and the
interest they add to government debt will have cost $3.7 trillion.

Those numbers will likely animate the political debate over the
president's fiscal policies throughout the election season. Democratic
candidates sought yesterday to put the swelling deficit into the
context of their attacks on Bush's credibility over the justifications
for invading Iraq.

"Just as disturbing as the news today about the record deficits the
Bush administration has run up is the White House's response to the
situation. President Bush is repeating two dangerous habits:
misleading the American people and ducking responsibility for his
mistakes," said Sen. Joseph I. Lieberman (D-Conn.), a candidate for
the 2004 presidential nomination. "Everyone knows what is really
responsible for these deficits," he concluded, "the unfair,
unaffordable, and ineffective Bush tax cuts."

Rep. John M. Spratt Jr. (S.C.), ranking Democrat on the Budget
Committee, lamented, "There seems to be no shame, no shock and no
solution."

For both the Democrats and Bush, addressing the deficit presents a
quandary. Mindful of his father's deficit-reduction experiences of
1991 and 1992, when President George H.W. Bush broke his "no new
taxes" pledge, the president will be loath to reverse course on his
own tax cuts. But he has also proved reluctant to demand deep spending
cuts and risk alienating moderate voters.

Because the tax cut enacted last month locked in tax reductions that
otherwise would have been phased in long after next year's election,
Democratic candidates would have to advocate raising taxes to have
much impact on the deficit. That also is politically perilous.

"We're in a very tough bind now," said Robert L. Bixby, executive
director of the Concord Coalition, a nonpartisan budget watchdog
group. "A lot of the stuff that caused this problem has been sort of
baked in the cake."

Sen. Kent Conrad (N.D.), ranking Democrat on the Budget Committee,
suggested yesterday some form of "tax reform" that would help close
the gap between the amount of taxes owed and the amount actually paid.
That "tax gap" is approaching $300 billion a year, he said, hinting
that tougher enforcement of the tax code could substantially reduce
the deficit without a tax increase.


---------------

George W has got problems he doesn't even know about
__________________________________________________ ___________________

[1]
The US Government now has the deepest debts of any government in the world.
If it were a private business, it would have been declared bankrupt.


[2]
All the governments of the world combined, do not spend as much money on
their military, as the US Government.


[3]
To pay for it's vast trade and budgetary deficits, the USA has to continuously
import capital from Europe.

Europe buys US Government bonds and other US based financial assets.
If Europe did not supply this capital, the US economy would collapse.
__________________________________________________ ___________________

werner hetzner

Where was Weisman before july 16?

"
In the 1990s the federal government created $2.8 trillion of new debt;
more than created in the nation's entire history prior to 1990 .

Fiscal Year 2000 ended with the highest dollar debt
in U.S. history - despite more claims of a 'surplus'
and, Fiscal Year 2001 debt was higher than that.
and, 2002 debt was $420 billion higher.

In the 4 years 1997-2001, before 9-11, total federal debt increased $438
billion,
a period when politicians bragged about a $557 billion surplus.
That's a $1 Trillion creditability gap .
(Some might suggest Enron and others learned reporting gimmickry from
government practices)
"
http://home.att.net/~mwhodges/debt.htm

see also:
http://1marketsquare.com/CapLP/Environment.shtml
http://1marketsquare.com/CapLP/Social%20Security.shtml
http://1marketsquare.com/CapLP/Health%20Care.shtml
http://1marketsquare.com/CapLP/Drugs.shtm
http://1marketsquare.com/CapLP/Education.shtml
http://1marketsquare.com/CapLP/Poverty.shtml
http://1marketsquare.com/CapLP/ExampleTOC.shtml
and more

Dollars in the common treasury are like fish in the common sea - anyone
who can will harvest to extinction. That is why socialism is
fundamentally corrupting and can not work.

john starrett

<snip>

Republicans control both houses. They could cut spending if
they wanted to.

--

John Starrett

"It does not require a majority to prevail,
but rather an irate, tireless minority keen
to set brush fires in people's minds."

Samuel Adams

renêÄ

Not really. You see, a couple of Republicans voted along with the Democrats
to not cut spending. If you examine the actual vote records (such as
published each week in Human Events) you will see that the Democrats vote,
almost without exception, to INCREASE federal spending and to OBSTRUCT tax
burden reduction, while the overwhelming majority of Republicans vote just
the opposite.

Today's Democrat Party ****s - it wants to INCREASE the burden on the
Working Class taxpayer and refuses to DECREASE the rate at which Tom
Daschle, Ted Kennedy, and John Kerry spend the Working Class taxpayer's
money.

renêÄ

Better yet, we need to remove the majority of the Democrats from Congress,
since the majority of the Democrats vote FOR increased spending and AGAINST
tax burden relief.

That is NOT true of the Republicans.

nathan a. stine

And yet STILL the Republicans (and Democrats) refuse to quit cutting taxes
on our nation's "working rich."

stiner
--
Our government is the potent, the omnipresent teacher. For good or ill it
teaches the whole people by example. Crime is contagious. If the
government becomes the lawbreaker, it breeds comtempt for laws; it invites
every man to become a law unto himself. . .[and] to declare that in the
adminstration of criminal law the end justifies the means--to declare that
the government commit crimes in order to secure the conviction of a private
criminal--would bring terrible retribution.

- Louis Brandeis

nathan a. stine

If only they were in opposition, we'd have a plan.

Stiner
--
Our government is the potent, the omnipresent teacher. For good or ill it
teaches the whole people by example. Crime is contagious. If the
government becomes the lawbreaker, it breeds comtempt for laws; it invites
every man to become a law unto himself. . .[and] to declare that in the
adminstration of criminal law the end justifies the means--to declare that
the government commit crimes in order to secure the conviction of a private
criminal--would bring terrible retribution.

- Louis Brandeis

kmar

Good thing the yanks haven't offended any europeans lately

kmar

But it's the good, republican kind of debt, not the bad, democratic
kind of debt. Got it?