Bush to trumpet improved budget figures

[Regis Philbin]

Alright Libs, if you're going to put all the blame on Bush for the deficits, you've got to give him credit for the improved revenues too...


http://news.yahoo.com/s/ap/20060711/ap_on_go_pr_wh/budget_deficit_3


According to Congressional Budget Office Figures released Friday, revenues are running $206 billion greater than those realized over a comparable period last year.

The nonpartisan CBO, which makes estimates for lawmakers, also said that the deficit for the first three quarters of fiscal 2006 came in $41 billion less than the red ink recorded for the same period in 2005. The budget year ends Sept. 30.

Those CBO figures say receipts are surging at an 13 percent growth rate, reflecting particularly strong growth in taxes paid on corporate profits and income taxes paid by wealthier people and small businessmen who pay taxes quarterly instead of having them withheld by employers. Those tax collections are more prone to fluctuate, budget experts say.

Income and payroll taxes paid by individuals, which tend to be more stable, are growing at a slower 8 percent rate, CBO says.

"We've had extraordinarily good profit growth, and when you have better profit growth than wage growth you tend to have windfall tax revenues because taxes on profits are higher than taxes on wages," said Diane Swonk, chief economist for Mesirow Financial, a Chicago-based financial services firm.

Swonk predicted that the unexpected revenue surge would ease around the end of the year as profits peak.

Bush has had few opportunities to boast about the deficit over the course of his time in office. He inherited in 2001 a surplus estimated by both White House and congressional forecasters at $5.6 trillion over the subsequent decade, and it quickly dwindled.

Those faulty estimates assumed the late-1990s revenue boom — fueled by the stock market and dot.com booms — would continue. But that bubble burst, and a recession and the Sept. 11, 2001, terrorist attacks started a flow of red ink. Several rounds of tax cuts, including Bush's signature $1.35 trillion tax cut in 2001, also contributed to the return to deficits four years ago after four years of budget surpluses.

[DoubleEdgeSword]

I couldn't get by your headline, Regis. In my family, the world "trumpet" means to fart. Whoa, what an image.
:roll:

[Venisenvy]

The economy is doing greats, the numbers are good but I still can't get by the fact that our economy could be so much better now and in the future if we would practice some fiscal responsibility. Under the Republican congress spending has gone up too much and these higher than expected tax profits do not make up for it. Who knows if from the beginning we were practicing sound management we might even have a surplus. With the tax cuts, the cuts in pork and wasteful spending and the rebound of the economy things could have been so much better. The defecit is thankfully not as bad as predicted but even now it is still bad.

[pinky]

It's kind of like being at the bottom of a 150-ft well, and managing to climb out of the 3 feet of water in the bottom....it's an improvement, but you're not out of danger yet.

[Venisenvy]

To be fair its a bit better than a 3ft climb, these figures are amazing if you consider the horrible numbers that were being predicted. It means the economy is doing so much better than was imagined. And thats thanks to the tax cuts, they do work. The problem is that it wasnt followed up by sound fiscal responsibility, we could be so much better right now if spending were cut. There is so much wasteful spending its not funny and Bush doesnt have the balls to veto a bill.

This is not just a small improvement, its pretty damn good news but if you factor in what should have been done and wasnt this feels like a hollow improvement because we should be doing so much better.

[pinky]

Did you read the last sentence posted? Several rounds of tax cuts, including Bush's signature $1.35 trillion tax cut in 2001, also contributed to the return to deficits four years ago after four years of budget surpluses. Without those tax cuts, the deficit wouldn't have been so enormous to begin with.

Besides, if you look at the effect of those tax cuts on other things, like state tax increases (needed to pay for the federal government's unfunded mandates in things like No Child Left Behind), increased tuition because of cuts in federal aid for higher ed, and other programs, the majority of Americans really haven't seen any increase in their personal situation.

[Richard Tafoya]

And then there are the next four grafs of the story:

Even before the release of the figures, critics poked at the White House figures, citing, for example how they are at odds from Bush's original budget released in 2001, which predicted a $305 billion surplus for the current year, even after accounting for tax cuts.

"The deficit's probably going to be in the range of $300 billion and that still represents a swing of about $600 billion from what was projected in 2001," said Rep. John Spratt (news, bio, voting record) Jr. of South Carolina, top Democrat on the Budget Committee. "You've still got triple-digit deficits for as far as the eye can see."

Some budget experts say the steep rise in tax receipts looks more impressive than it really is since revenues are bouncing back from a three-year decline during Bush's first term, drops not seen since the Great Depression.

"The current so-called revenue surge is merely restoring revenues to where they were half a decade ago," said Robert Greenstein, executive director of the liberal-leaning Center on Budget and Policy Priorities think tank. That's after accounting for inflation and population growth.