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Friday, September 09, 2005
Monthly Budget Review Predicts Higher Deficits
The Congressional Budget Office released their Monthly Budget Review this week, in which they noted that for the first eleven months of this fiscal year (which ends Sept. 30), the government ran a deficit of $352 billion. For various reasons, including that fact that corporate receipts were up due to specifics in certain expiring tax laws, this deficit is $85 billion less than the deficit run at this time last year. These facts have allowed President Bush to claim that he is on track to cutting the deficit in half by 2009 (one of his many campaign promises).
The reality is, the Hurricane Katrina disaster will affect deficit levels for 2006. The CBO report states that deficits will not be greatly affected for FY 2005 because we only have one month to go; however they do mention "substantially greater costs will be incurred in fiscal year 2006."
It looks like we can expect deficits to be on the rise again in the year to come. The administration is not to blame for the fact that the disaster will have a negative effect on the FY 2006 deficit. However, the administration is to blame for our deficits being so high in the first place. In 2004 the budget deficit was $412 billion, and most of that was due to Bush's massive tax cuts. Now we are being forced to engage in deficit-financed spending because of the recent disaster, and the administration can claim that they had no control over what is sure to be a very high deficit figure next year. If not for their prior policies, however, our deficits would have never been so high in the first place.
Posted by Becky Lewis
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