CBO projects $172 billion deficit, official says

CBO projects $172 billion deficit, official says
By Andew Taylor
The Associated Press
Article Last Updated: 01/24/2007 07:24:35 AM MST

Posted: 7:24 AM- WASHINGTON - The budget deficit for the current year will be $172 billion, according to new estimates by the Congressional Budget Office.
The latest CBO figures, disclosed by a congressional aide, also predict the budget could come back into surplus by 2012, although that would require President Bush's tax cuts to expire at the end of 2010.
The estimates also understate the ongoing cost of the war in Iraq, but provide a basis for majority Democrats on Capitol Hill to work to match Bush's vow to balance the federal budget in five years.
The improvement in the deficit figure comes as federal tax receipts have continued to grow above estimates. The deficit for the 2006 budget year registered $248 billion.
The CBO figures, to be officially released later Wednesday, show the budget registering a $12 billion surplus by 2012.
But the figures are, at best, a rough estimate since the agency follows strict conventions, including assuming that Bush's tax cuts expire as scheduled under current law. If they are extended, along with changes to the alternative minimum tax, the costs would swallow about $300 billion of the projected surplus for 2012, according to prior CBO estimates.

Salt Lake Tribune - CBO projects $172 billion deficit, official says

I love they way the STILL try to make this bad news. The fact is the CBO has consistently OVER estimated the deficit and UNDERESTIMATED economic growth which is pouring in revenues and cutting the deficits. They had previous predicted deficits of over $400 billion.

Now will the Democrats turned this all around with their punitive tax increases and spending programs? If they just leave everything alone, reinstate the tax cuts, hold spending to inflation we will have surpluses within the next 5 years IMO.

No matter how good the news is, the liberal Dems will do all they can to tear it down.

This is good, thought somewhat misleading news, as these deficit figures are computed based on using approximately $200 billion of excess SS payments -- which are supposed to be saved for the boomers' retirements -- as general revenues. The "on-budget" deficits (the real Govt operating budget) are projected to remaining in deficit (though declining) throught that decade.

There is a major reason why the CBO projections have the budget being balanced over 5 years -- it is based upon the Bush tax cuts expiring and not being renewed. Undoing these tax cuts will provide much needed reveues that will balance the budget.

The CBO states that if the tax cuts are made permanent, it will decrease revenues by $3 trillion over 10 years -- resulting in permanent deficits and debt growth.

http://cbo.gov/ftpdocs/77xx/doc7733/01-25-Outlook_Testimony.pdf Page 2.

Stinger said:

The latest CBO figures, disclosed by a congressional aide, also predict the budget could come back into surplus by 2012, although that would require President Bush's tax cuts to expire at the end of 2010.
Salt Lake Tribune - CBO projects $172 billion deficit, official says

Now will the Democrats turned this all around with their punitive tax increases and spending programs? If they just leave everything alone, reinstate the tax cuts, hold spending to inflation we will have surpluses within the next 5 years IMO.

Click to expand...

Do you even read your own links? It clearly says that the projection for a surplus is dependent on the tax cuts expiring. Again, if the tax cuts expiring results in increased federal revenue so there's a surplus, how exactly does reinstating the tax cuts result in surpluses within the next 5 years?

Again, I will note that record federal revenues have occurred in 45 of the 50 years between 1950-2000. That's 90% of the years, there was a record in federal revenue. Once Bush took over, after his tax cuts, revenue decreased for 3 straight years for the first time ever and did so while the economy was still growing, which had only happened in 1 year between 1950-2000. This is your "proof" that the tax cuts grow federal revenue?

The estimated population of the United States is 300,799,062
so each citizen's share of this debt is $28,870.71.

The National Debt has continued to increase an average of
$1.51 billion per day since September 29, 2006!

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U.S. National Debt Clock

So how does this news bring the debt down???

Cremaster77 said:

Do you even read your own links? It clearly says that the projection for a surplus is dependent on the tax cuts expiring. Again, if the tax cuts expiring results in increased federal revenue so there's a surplus, how exactly does reinstating the tax cuts result in surpluses within the next 5 years?

Again, I will note that record federal revenues have occurred in 45 of the 50 years between 1950-2000. That's 90% of the years, there was a record in federal revenue. Once Bush took over, after his tax cuts, revenue decreased for 3 straight years for the first time ever and did so while the economy was still growing, which had only happened in 1 year between 1950-2000. This is your "proof" that the tax cuts grow federal revenue?

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Did you read what else I said. The CBO predicted the deficits would be over $400 billion WITH THE EXISTING TAX CUTS, they have consistently underestimated the resulting tax revenues the cuts bring in and yet even now they are predicting deficits far below their previous estimates. And it's not the shear amount that has been hitting records, it's the increases and %'s.

But I knew you guys just wouldn't be able to stand it.

Iriemon said:

The CBO states that if the tax cuts are made permanent, it will decrease revenues by $3 trillion over 10 years -- resulting in permanent deficits and debt growth.

http://cbo.gov/ftpdocs/77xx/doc7733/01-25-Outlook_Testimony.pdf Page 2.

Click to expand...

And they are historical wrong. They had estimated the current deficits would be over $400 billion, they refuse to accept what we now know, tax cuts spur the economy and in the long term increase revenues.

The dishonesty of the claim on deficits is due to the fact that cost of the war in Iraq is not even factored in. Add that, and you will get much higher numbers, and they will be the real numbers, not the ones made by cooking the books. Want to know how much the war is costing? Then read this.

To the Bush administration - A line from a song I wrote:

"Well spin it some more son, I ain't listening to you"

Stinger said:

CBO projects $172 billion deficit, official says
By Andew Taylor
The Associated Press
Article Last Updated: 01/24/2007 07:24:35 AM MST

Posted: 7:24 AM- WASHINGTON - The budget deficit for the current year will be $172 billion, according to new estimates by the Congressional Budget Office.
The latest CBO figures, disclosed by a congressional aide, also predict the budget could come back into surplus by 2012, although that would require President Bush's tax cuts to expire at the end of 2010.
The estimates also understate the ongoing cost of the war in Iraq,

Click to expand...

Ahh......ye olde :spin: by Mr. Stinger....good job!

Let's see...we balance the budget IF we take away the tax cuts and IF we do not count the actual cost of the war in Iraq in the budget?

:rofl

Thank you for exposing the spin that Bush and his cronies continue to try to fool Americans with...they certainly seemed to have fooled you Stinger!

Stinger said:

And they are historical wrong. They had estimated the current deficits would be over $400 billion, they refuse to accept what we now know, tax cuts spur the economy and in the long term increase revenues.

Click to expand...

Wow...even better :spin: ! HO HO HO! Now you're saying that the CBO doesn't know what it's talking about but you, Stinger, do! WOW, WOW, WOW! :rofl

Stinger said:

And they are historical wrong. They had estimated the current deficits would be over $400 billion, they refuse to accept what we now know, tax cuts spur the economy and in the long term increase revenues.

Click to expand...

I agree projections are suspect. Remeber when they predicted surpluses before the Bush tax cuts? Ha ha

Iriemon said:

I agree projections are suspect. Remeber when they predicted surpluses before the Bush tax cuts? Ha ha

Click to expand...

Before they knew we would be hit with 9/11 and the effects on the financial markets? Yes I do. But I also remember how the last few years they have underestimated the stimulus the tax cuts did give to the economy so it wasn't worse. And now we see they overestimated the deficit by almost half. If they are as wrong now as they have been then the deficits could well fall below $100 billion.

So tax the money or leave it in the economy to be invested and productive?

Perhaps this post should be in the media bias forum, but it seems appropriate here as well....in a recent Opinion Journal piece, James Taranto points out this from the NYTs:

Two Papers in One!

* "Neither broken promises nor failed policies changed Mr. Bush's mind. So the nation has been saddled with tax cuts that have turned a budget surplus into a big deficit."--editorial, New York Times, Jan. 24

* "The nonpartisan Congressional Budget Office predicted on Wednesday that the federal budget deficit would shrink again this year. . . . The agency predicted that the deficit for 2007 would decline to about $200 billion. It would be the third big annual decline in a row. . . . The decline of the deficit comes on the heels of unexpectedly large increases in tax revenue over the last two years."--news story, New York Times, Jan. 25

Click to expand...

oldreliable67 said:

Perhaps this post should be in the media bias forum, but it seems appropriate here as well....in a recent Opinion Journal piece, James Taranto points out this from the NYTs:

Click to expand...

The decline of the deficit comes on the heels of unexpectedly large increases in tax revenue over the last two years.

Click to expand...

Unexpected... by the liberals, maybe.

Increased economic growth = larger tax base = more revenue.

What, then, was unexpected -- the economic growth?

Why?

Goobieman said:

Unexpected... by the liberals, maybe.

Click to expand...

Certainly by those afflicted with BDS.

Increased economic growth = larger tax base = more revenue.

What, then, was unexpected -- the economic growth?

Why?

Click to expand...

Because that would mean too much credit would have to be give to Bush's policies.

Never forget that the party out-of-power wants nothing more, nothing less than for the party currently in power to fail. And the bigger the failure, the better! Hence, the Democrats most oft-repeated prayer right now is for US failure in Iraq...but thats another thread.

oldreliable67 said:

Because that would mean too much credit would have to be give to Bush's policies.

Never forget that the party out-of-power wants nothing more, nothing less than for the party currently in power to fail. And the bigger the failure, the better! Hence, the Democrats most oft-repeated prayer right now is for US failure in Iraq...but thats another thread.

Click to expand...

They just can't stand it.

Besides which Party gets credit or blame--can we start Brainstorming on what we will tell the future generations on the massive debt they will have to pay and/or why things stagnated from it?

I will start: It's just money and people really where in need back then, they actually had to type on computers and some Americans were even without high speed connections.

It's for the best to have to struggle as it will bring about very strong character.

Navy Seal Patriot said:

Besides which Party gets credit or blame--can we start Brainstorming on what we will tell the future generations on the massive debt they will have to pay and/or why things stagnated from it?

I will start: It's just money and people really where in need back then, they actually had to type on computers and some Americans were even without high speed connections.

It's for the best to have to struggle as it will bring about very strong character.

Click to expand...

If the Democrats will stop their partisian, class warfare politics and realize that if they just leave the tax rates alone, extend the tax cuts, hold spending to the rate of inflation the deficit will go away and we can begin to pay down the debt, and especially if we can reform SS and Medicare.

The prescription drug plan is working, giving people choice and control and getting the market forces involve work. Do so with SS and Medicare/caid.

But don't count on it, punitive tax increases and tax the wealthy schemes to placate the voters is what they have in store.

Stinger said:

Before they knew we would be hit with 9/11 and the effects on the financial markets? Yes I do. But I also remember how the last few years they have underestimated the stimulus the tax cuts did give to the economy so it wasn't worse. And now we see they overestimated the deficit by almost half. If they are as wrong now as they have been then the deficits could well fall below $100 billion.

So tax the money or leave it in the economy to be invested and productive?

Click to expand...

Why does taxing the money cause it to not be invested or productive? What do you think the Govt does with the tax revenues? Burn it?

Or are you saying the Govt should just keep on borrowing $1/2 trillion every year like the pass the buck Republicans do?

oldreliable67 said:

Perhaps this post should be in the media bias forum, but it seems appropriate here as well....in a recent Opinion Journal piece, James Taranto points out this from the NYTs:

Click to expand...

* "The nonpartisan Congressional Budget Office predicted on Wednesday that the federal budget deficit would shrink again this year. . . . The agency predicted that the deficit for 2007 would decline to about $200 billion. It would be the third big annual decline in a row. . . . The decline of the deficit comes on the heels of unexpectedly large increases in tax revenue over the last two years."--news story, New York Times, Jan. 25

Click to expand...

Amazing prediction, given that the Govt has already borrowed about $180 billion in the first 4 months of FY2007.

Goobieman said:

Unexpected... by the liberals, maybe.

Increased economic growth = larger tax base = more revenue.

What, then, was unexpected -- the economic growth?

Why?

Click to expand...

What was expected, according to Bush and the cons who pandered the tax cuts, was superior economic growth.

What was achieved was sub-par economic growth.

Stinger said:

If the Democrats will stop their partisian, class warfare politics and realize that if they just leave the tax rates alone, extend the tax cuts, hold spending to the rate of inflation the deficit will go away and we can begin to pay down the debt, and especially if we can reform SS and Medicare.

The prescription drug plan is working, giving people choice and control and getting the market forces involve work. Do so with SS and Medicare/caid.

But don't count on it, punitive tax increases and tax the wealthy schemes to placate the voters is what they have in store.

Click to expand...

Same pass the buck drivel the cons have used to justify tax cuts from the days of Reagan's voodoo economics. The promise you can slash taxes and magically revenues will grow stronger and there will be no deficits and debt.

And the pass the buck generation has swallowed this hook line and sinker.

It didn't work in the 80s and isn't not working now. Instead the nation's debt has grown from $1 trillion in 1980 to pushing $9 trillion today. The interest expense is $400 billion annually, and growing rapidly.

And still we hear the pass the buckers mantra -- cut taxes and there will be no deficits ...

As far as slashing spending, I don't expect the Dems to slash programs that help Americans when for 6 years the Republicans were too spineless to do it. They had their chance.

Iriemon said:

Why does taxing the money cause it to not be invested or productive?

Click to expand...

Because it is consumed into non-productive activities through inefficient procedures and processess. For instance income I produce which I could invest with a company to produce a piece of capital equipment (paying all the people who produce it) which is then used to add value to a resource ( an employ people who run the process) creates wealth. If that income is taken in the form of taxes and passed through all the hands (who must be paid for their time an effort while adding nothing of value) to someone who doesn't work or produce anything and merely consumes what is left of the value passed on to them. Or use for useless government projects which employ people in non-productive activities. Or the waste and fraud inherent in government. And on and on.

What do you think the Govt does with the tax revenues? Burn it?

Click to expand...

They may as well with some of it.

Or are you saying the Govt should just keep on borrowing $1/2 trillion every year like the pass the buck Republicans do?

Click to expand...

Where do you get that impression when I am highlighting how great it is the deficit is falling and we are keeping more money in our own pockets?

Stinger said:

Because it is consumed into non-productive activities through inefficient procedures and processess.

Click to expand...

Aside from military spending, then.

For instance income I produce which I could invest with a company to produce a piece of capital equipment (paying all the people who produce it) which is then used to add value to a resource ( an employ people who run the process) creates wealth. If that income is taken in the form of taxes and passed through all the hands (who must be paid for their time an effort while adding nothing of value) to someone who doesn't work or produce anything and merely consumes what is left of the value passed on to them. Or use for useless government projects which employ people in non-productive activities. Or the waste and fraud inherent in government. And on and on.

Click to expand...

When a tax dollar goes to the Govt, and the govt buys something or sends a retiree a check, the money is being put back into the economy.

The person who receives the dollar from the govt could invest it, or if he consumes something that is creating demand which drives production and the economy.

Your contention that revenues to the Govt somehow disappear and don't count in the economy is wrong.

Where do you get that impression when I am highlighting how great it is the deficit is falling and we are keeping more money in our own pockets?

Click to expand...

Because that is the consequences of slashing revenues when the Govt doesn't slash spending. Since the Govt doesn't slash spending, supporting tax cuts is the same as supporting deficits.

Which is why the nation's debt is approaching $9 trillion.

Iriemon said:

Aside from military spending, then.

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They aren't the most efficient at it either, but at least it can be said they are necessary.

When a tax dollar goes to the Govt, and the govt buys something or sends a retiree a check, the money is being put back into the economy.

Click to expand...

After it has passed through the jaws of government eating up the cost of such a transfer to a person who was non-productive.

The person who receives the dollar from the govt could invest it, or if he consumes something that is creating demand which drives production and the economy.

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If government is taking one persons money and giving it to another who doesn't need it for immediate needs and is "investing" it then something is wrong with this picture.

Your contention that revenues to the Govt somehow disappear and don't count in the economy is wrong.

Click to expand...

Your attempt to paint it as I said it disappeared is dishonest on it's face.

Because that is the consequences of slashing revenues

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Revenues are not our problem and the deficit is falling faster than predicted.

I know you just can't stand it.