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Federal Deficit Likely to Narrow by $100 Billion
Tax Receipts Pare Borrowing
By Jonathan Weisman
Washington Post Staff Writer
Tuesday, May 4, 2004; Page E01
Smaller-than-expected tax refunds and rising individual tax receipts will pare back federal borrowing significantly for the first half of this year and could reduce the $521 billion deficit projected for the fiscal year by as much as $100 billion, Treasury and congressional budget officials said yesterday.
The Treasury Department's borrowing estimates may prove to be more good news for President Bush on the economic front, as opponents attempt to make his fiscal stewardship a campaign issue. The $184 billion the government is now expected to borrow through June is a 27 percent improvement from Treasury's February projection of $252 billion, the department said.
G. William Hoagland, a senior economic aide to Senate Majority Leader Bill Frist (R-Tenn.), said he dashed off a memo to GOP leadership predicting the 2004 deficit could be trimmed to $420 billion, a record in dollar terms but considerably lower than the White House's $521 billion projection.
"This is better than what everybody expected," Hoagland said.
Democratic and Republican budget aides in the House warned yesterday that it was too early to reach conclusions. Spending could still take an unexpected jump because of surging hostilities in Iraq. The improving federal borrowing picture, they said, may just be bringing the administration's $521 billion deficit forecast more into line with the $477 billion deficit predicted by the nonpartisan Congressional Budget Office, Capitol Hill's official budget scorekeeper.
Individual disappointments last month could prove to be to the government's fiscal advantage. Earlier this year, Bush had boasted that this year's average income tax refund would be $300 larger than it would have been without last year's tax cut. But refunds have fallen well short of that mark. Treasury officials also cited lower-than-expected government spending and higher payroll and individual income taxes as reasons that less borrowing may be needed.
All of this indicates that the improving economy is beginning to slow a three-year slide in overall tax receipts.
"The 5.5 percent average [economic growth] pace in the latest three quarters was the largest since 1984," said Mark J. Warshawsky, assistant Treasury secretary for economic policy, in a statement to the department's borrowing advisory committee. "With the assistance of tax cuts, growth has become self-sustaining."
An improving picture could strengthen the political hands of the president and House Republican leaders as they wrangle with the Senate over more tax cuts and a budget blueprint for the fiscal year that begins Oct. 1. For weeks, the negotiations have been stalled, with a majority of the Senate demanding new procedural hurdles for further tax cutting and the House and White House steadfastly refusing.
The latest compromise would mandate that tax cuts over the next three years be offset by equal tax increases or spending cuts, unless 60 Senate votes could be mustered to set the restriction aside. However, under the compromise being floated, some tax cuts -- $92 billion worth in 2005 -- would be exempted from that restriction under Congress's annual budget resolution.
So far, House tax cutters have been undaunted by federal red ink. Last week, lawmakers in both parties voted overwhelmingly to make permanent Bush's tax cuts for married couples, a bill that would cost the Treasury $105 billion over 10 years. For the next three weeks, the House has scheduled successive votes on more tax cuts totaling hundreds of billions of dollars.
Boy, talk about a bunch of glass half-empty guys. The reason there will be more money in the tills is that the economy is improving. If it keeps going this way, Kerry can kiss his presidential bid goodbye.
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“So I became a newspaperman. I hated to do it but I couldn’t find honest employment.” —Mark Twain
Boy, talk about a bunch of glass half-empty guys. The reason there will be more money in the tills is that the economy is improving. If it keeps going this way, Kerry can kiss his presidential bid goodbye.
How you can spin this into a positive for Bush is beyond me.
That said, I can't believe that a large percentage of voters see it as you do either. I believe Bush supporters have a rude awakening coming this November.
Boy, talk about a bunch of glass half-empty guys. The reason there will be more money in the tills is that the economy is improving. If it keeps going this way, Kerry can kiss his presidential bid goodbye.
How is smaller tax refunds than promised better for individuals?
How is rising individual (as opposed to corporate) tax receipts better? Isn't that money that would be better off flowing into the economy rather than going to the Feds in Washington DC?
Boy, talk about a bunch of glass half-empty guys. The reason there will be more money in the tills is that the economy is improving. If it keeps going this way, Kerry can kiss his presidential bid goodbye.
Once again, you have put your delusional spin on a terrible situation. You don't exhibit one sensible viewpoint on anything that is going on in the world.
Bush inherited a surplus and turned it into a trillion dollar deficit. That makes you happy? Why?
Maybe you never considered that the reason mortgage rates are at such a temporary low rate is because the U S Treasury Dep't hasn't had to borrow money from the Fed. That is because the fed had all of this money laying around earning nothing, so they offered it to the consumer at low rates due to the lack of competition for those funds. Well guess what Pilgrim, the party is over. Now that the surplus is gone and your Bush Cartel is stepping up to the window, the rates will sky rocket. Where is your positive spin now?
Bush's banking buddies ought to be elated now that he has mortgaged
our grandchildren, but then maybe you don't have any to worry about. The Federal Credit Card has just maxed out and the tax dollars will now be spent on war debt. Be careful you don't choke on the contents of your half full glass
of debt.
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In politics, nothing happens by accident. If it happens, you can bet it was planned that way.
Franklin D. Roosevelt
"Those who can make you believe absurdities can make you commit atrocities." --Voltaire
Boy, talk about a bunch of glass half-empty guys. The reason there will be more money in the tills is that the economy is improving. If it keeps going this way, Kerry can kiss his presidential bid goodbye.
I wish this economic glass was half-empty. It's nowhere near that. When something gets to such a terrible shape, improvement isn't that impressive. You have to look at absolute numbers, not relative numbers.
It's like if the Cardinals went 1-15 next year, then 2-14 the next year and being ecstatic that they were twice as good.
and you wouldn't have to pay nearly as much if your government didn't spend $300 Billion on Empire building invasions.
Hey we agree wally!!!!! To utterly flattenen an enemy without nukes would cost at a maximum 10 billion. Cutting out peace keeping and empire building would save us a ton of cash!!!
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