I would also like to point out how Bush's revenue slashing affects the AMT's reach into the middle class. The Bush tax regime depends on over 13 million taxpayers to subsidize tax cuts for the wealthy. Granted some of those 13 million are wealthy, but many are not. The chart below shows how AMT liability per income group changes because of the 2001-2003 tax cuts

CBO's The Budget and Economic Outlook: An Update is a statute-directed baseline: "In accordance with long-standing procedures, CBO's projections assume that current laws and policies remain in place." So, the revenue figures in years 2010-2017 reflect a scenario in which the 2001/2003 tax cuts expire (as legislated). If Congress does nothing - that is let the sun set on tax cuts, the Treasury will see surpluses starting in 2012. But if those tax cuts are extended, it's a river of red ink.

There's really nothing new here. I just wanted to point out - again - how expensive the Bush Revenue Reduction Program is.

To follow up on Craig's post below on the CBO budget outlook released today, the Center on Budget points out that CBO flatly contradicts the President's claim that "tax cuts are boosting the economy and significantly improving the budget outlook for coming years."

The outlook for the economy and the budget in 2008 through 2017 has not improved significantly since the beginning of this year... The modest improvements in CBO's projections of revenues and deficits for years after 2007 ... were due to factors that cannot be attributed to the President's tax cuts, notably higher-than-anticipated inflation this year, a slightly larger projected labor force, and an increase in the projected share of GDP represented by corporate profits.

It is worth noting as well that the Bush tax cuts have probably already had far more significant economic and budgetary impact (for good or ill) than they might still have today, let alone in the "coming years," which in any case end long before 2017, since the tax cuts expire in 2010.

As we have reported, CBO had a look last month at the economic (negligible) and budgetary (devastating) impact of the Bush tax cuts, at this stage of the game, 2007.

Or is it simply too late for the White House to revise stale talking points, at this point?

Senate Majority Leader Harry Reid has announced that the Senate will vote on the nomination of Jim Nussle to be the new Director of the Office of Management and Budget on Monday, September 4 - the first day back from the August recess. Reid announced there will be three hours of debate on the nomination beginning at 2:30 pm. One hour each for the chairman and ranking member of the budget committee, and one hour controlled by Sen. Bernie Sanders (I-VT).

Sanders has announced a hold on Nussle's nomination because he has serious concerns about the nominee and his philosophical differences with the administration's fiscal policies. Sanders said:

President Bush is completely out of touch with the economic realities facing working families in America. Bush needs to hear the truth, not an echo. He needs a budget director who will make him face the facts, not fan his fantasies.

Receipts in July 2007 were about $10.5 billion (or 7 percent) higher than they were in July 2006, CBO estimates. Higher withholding for individual income and payroll taxes explains the gains, with an increase of almost $11 billion (or 8 percent). Net corporate receipts for the small number of companies that make income tax payments in July were lower by about $1 billion (or 10 percent).

Outlays were $15 billion (or 8 percent) greater this July than they were last July, CBO estimates. Defense spending accounted for the strongest growth, up by about $6 billion (or 14 percent), largely in the areas of operations, maintenance, and procurement. Medicare outlays grew by $4 billion (or 13 percent) after adjusting for timing shifts, while spending for Social Security and net interest on the public debt were up by $3 billion (or 6 percent) and $2 billion (or 8 percent) respectively.

The CBO also reports that through the 10 months in FY 2007, the federal budget deficit was $158 billion. Compared to last year, revenues are rising more slowly - but up by 7 percent, and outlays are up 3 percent.

Monthly Budget Review, August 6, 2007