You wouldn't know this from all the garment-rending yesterday in response to Mr. Bush's proposal to spend the not-so-meager sum of $2.9 trillion. Our favorite agonist is Kent Conrad, the Senate Budget Committee Chairman, and he didn't disappoint. "The President's budget is filled with debt and deception, disconnected from reality, and continues to move America in the wrong direction," said the Senator who was himself blocked from sneaking nearly $5 billion in "emergency" farm spending into a military construction bill in the final days of the last Congress. The North Dakotan needs to keep shouting disaster in a crowded political theater so he can justify his desire for a big tax increase.
The news Mr. Conrad won't broadcast is that over the past three years the federal deficit has shrunk by 58%. The Congressional Budget Office--not the White House--is estimating that the current year's deficit (for fiscal 2007) will fall to $172 billion. That's not bad given continuing Katrina relief spending, $30 billion for homeland security, and a couple hundred billion or so to fight the war on terror.
The White House is projecting that its new budget will eliminate the deficit by 2012 assuming Mr. Bush's tax cuts are extended after 2010. We don't put much stock in future budget forecasts because they depend on so many variables. But even CBO predicts the deficit should remain near or below 1% of GDP for the rest of the Bush Presidency. That's well below the 40-year average of 2.4% of GDP.
So what this guy is basically saying is that we're not out of the woods and have a massive surplus, but we're heading in the right direction financially even though we've had Katrina, 9/11, the War on Terror, and other major financial hits. You'd think Republicans were actually doing what they say they'd do when they say they'll cut taxes and be more financially responsible.
Travis
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