Brighter ’06 Deficit Outlook, but Long Term Looks Grim
By EDMUND L. ANDREWS
New York Times
WASHINGTON, Aug. 17 — The federal budget deficit will shrink this year to its lowest level since 2001, but the fiscal outlook for the next 10 years is as bleak as ever, the Congressional Budget Office said Thursday.
The budget office estimated the deficit for the 2006 fiscal year, which ends on Sept. 30, at $260 billion. That would be $58 billion less than last year, $112 billion less than the agency estimated in March and even lower than the White House’s most recent forecast.
The improvement is almost entirely a result of an unexpectedly big jump in tax revenue, particularly in corporate tax receipts and what appear to be higher payments by the nation’s wealthiest households.
Measured as a share of the nation’s total output, this year’s deficit would equal about 2 percent of gross domestic product, a level that Donald B. Marron, acting director of the budget office, described as “sustainable.”
But the nonpartisan agency also offered ample evidence that deficits would be above $300 billion, perhaps well above, for much of the next decade.
Extending President Bush’s tax cuts beyond 2010, as Republican leaders want, would cost $1.75 trillion over the next 10 years and widen annual deficits by about $250 billion from 2011 through 2016, the report said.
On top of that, it said, the government will incur an additional $1 trillion in debt, nearly $100 billion a year, if it prevents an expansion of the alternative minimum tax. That levy was originally aimed at millionaires but is set to engulf many middle-class households because it is not adjusted for inflation.
(There's more, here.)
New York Times
WASHINGTON, Aug. 17 — The federal budget deficit will shrink this year to its lowest level since 2001, but the fiscal outlook for the next 10 years is as bleak as ever, the Congressional Budget Office said Thursday.
The budget office estimated the deficit for the 2006 fiscal year, which ends on Sept. 30, at $260 billion. That would be $58 billion less than last year, $112 billion less than the agency estimated in March and even lower than the White House’s most recent forecast.
The improvement is almost entirely a result of an unexpectedly big jump in tax revenue, particularly in corporate tax receipts and what appear to be higher payments by the nation’s wealthiest households.
Measured as a share of the nation’s total output, this year’s deficit would equal about 2 percent of gross domestic product, a level that Donald B. Marron, acting director of the budget office, described as “sustainable.”
But the nonpartisan agency also offered ample evidence that deficits would be above $300 billion, perhaps well above, for much of the next decade.
Extending President Bush’s tax cuts beyond 2010, as Republican leaders want, would cost $1.75 trillion over the next 10 years and widen annual deficits by about $250 billion from 2011 through 2016, the report said.
On top of that, it said, the government will incur an additional $1 trillion in debt, nearly $100 billion a year, if it prevents an expansion of the alternative minimum tax. That levy was originally aimed at millionaires but is set to engulf many middle-class households because it is not adjusted for inflation.
(There's more, here.)
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