I still have checks, I must have more money

[livendive 8]

Copied from The Seattle Times

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Huge deficit's effects could be far-reaching

By The Washington Post and Knight Ridder Newspapers

WASHINGTON — Additional war spending this year will push the federal deficit to a record $427 billion for fiscal 2005, effectively thwarting President Bush's pledge to begin stanching the flow of government red ink, according to new administration budget forecasts unveiled yesterday.

Administration officials rolled out an $80 billion emergency spending request, mainly for Iraq and Afghanistan, conceding the extra money would likely send the federal deficit above the record $412 billion recorded in fiscal 2004, which ended Sept. 30.

Bush has pledged to cut the budget deficit in half by 2009, a promise the administration insists it can keep. But at least for now, the government's fiscal health is getting worse.

The exploding deficit is likely to influence how Congress tackles a Republican agenda that calls for overhauling Social Security and making President Bush's first-term tax cuts permanent. Those two initiatives alone could cost the federal government an additional $3.5 trillion by 2015.

The worsening financial outlook increases pressure on Congress to accept spending cuts in domestic programs, including Medicare and Medicaid.

Some budget-watchdog groups were in despair over the government's long-term fiscal outlook.

"Nobody is talking about reining in entitlement programs, and no one is talking about repealing the tax cuts in any way," said Robert Bixby, executive director of the Concord Coalition, a bipartisan group devoted to balanced budgets. "When you look at the factors driving the deficit, they look very difficult to reverse. What you need to worry about is a spike in interest rates and a plunge in the dollar, or maybe rising inflation."

Indeed, America's massive federal budget and foreign-trade deficits are spawning global financial anxieties and driving down the value of the dollar. The United Nations yesterday warned that the U.S. deficits are pulling the world economy off balance.

"The seemingly intractable nature of the United States twin deficits suggests ... there is a risk the dollar could decline further," the U.N. report said. "This could pose difficulties for all other countries, notably those whose currencies float against the dollar."

Analysts said prolonged deficits could also damage U.S. economic growth, making it harder for the government to meet its debt obligations and forcing interest rates higher for all Americans.

Bush administration officials noted that although the projected $427 billion deficit is a record in dollar terms, as a percentage of the country's gross domestic product it has declined slightly.

But Senate Budget Committee Chairman Judd Gregg, R-N.H., said: "We must get serious about putting our financial house in order, beginning with short-term deficit reduction and then long-term control of entitlement spending. If we do nothing, our kids and grandkids will be overwhelmed by the cost of our inaction."

In separate briefings yesterday, administration officials detailed the rising cost of war while the nonpartisan Congressional Budget Office released its deficit forecast for the coming decade. Taken together, the briefings painted a sobering picture of the government's finances, despite a growing economy and rising tax receipts. The figures suggest the Bush administration will continue to have difficulty reining in federal deficits as long as war is draining the government's coffers.

Of the $80 billion request, at least $75 billion would fund the wars in Iraq and Afghanistan this year. An additional $5 billion would go toward building an embassy in Baghdad, continuing reconstruction in Afghanistan, offering assistance to the Palestinians and sending relief to the Darfur region of Sudan.

That $80 billion would come on top of $25 billion already appropriated for the wars this year, pushing the total cost of fighting to $105 billion, up from $88 billion in 2004 and $78.6 billion in 2003.

"Our troops will have whatever they need to protect themselves and complete their mission," Bush said in a statement.

The latest war request would push the total cost of military operations in Iraq, Afghanistan and other efforts since the Sept. 11 attacks to $277 billion, according to the budget office. That figure well exceeds the inflation-adjusted $200 billion cost of World War I, and is approaching the $350 billion cost of the Korean War, according to Commerce Department figures.

In a separate briefing, the director of the budget office said tax cuts and spending enacted last year by Congress will contribute an additional $504 billion to the government's overall anticipated debt between 2005 and 2014. Additional debt over that decade should total $1.36 trillion, well above the $861 billion the budget office projected in September.

A senior administration official told reporters that Bush's budget — to be unveiled Feb. 7 — will show the government on track to cut the budget deficit in half from the White House's initial deficit projection for 2004.

But the budget office's projections cast significant doubt on that claim. In total, the CBO projected, the government will rack up another $855 billion in debt between 2006 and 2015, but director Douglas Holtz-Eakin cautioned that figure almost certainly understates the problem. The total assumes no additional money will be spent in Iraq or Afghanistan over the next decade. Perhaps more important, the CBO, by law, must assume Bush's first-term tax cuts will expire after 2010.

The CBO forecast also excludes the cost of Bush's promised overhaul of Social Security, which could add $1 trillion to $2 trillion over the next decade.

Even with those favorable omissions, the CBO projected that Bush will miss his goal of cutting the deficit in half by 2009 from last year's level.

"Having racked up three of the largest deficits in history, the Bush administration is years away from reducing the deficit by half, or by any appreciable amount," said Rep. John Spratt of South Carolina, the ranking Democrat on the House Budget Committee.

Material from The Dallas Morning News and The Baltimore Sun is included in this report.

Blues,
Dave

"I AM A PROFESSIONAL EXTREME ATHLETE!"
(drink Mountain Dew)

[penniless 0]

But... but... but.... how can this be? Bush is a conservative.

[miked10270 0]

AS I see it there's only 2 ways out:

1. Last itme the US was involved in such an expensive war you could buy "War-Bonds"... So surely US citizens will be running to buy the new "Freedom-Bonds"!!??

2. Just in case the spiralling debt does trigger massive inflation & devaluation of the US$... It is vital that politicians go on an immediate fact finding tour to somewhere like, say, Argentina - WHILE IT'S STILL SUMMER DOWN THERE!

Mike.

Taking the piss out of the FrenchAmericans since before it was fashionable.

Prenait la pisse hors du FrançaisCanadiens méridionaux puisqu'avant lui à la mode.

[livendive 8]

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1. Last itme the US was involved in such an expensive war you could buy "War-Bonds"... So surely US citizens will be running to buy the new "Freedom-Bonds"!!??

An excellent way for our government to finance this expenditure. I wish they'd do a full-scale fund-raising effort that involved some sort of bonds. That way, those who support the effort can finance it and those who don't aren't forced to.

Blues,
Dave

"I AM A PROFESSIONAL EXTREME ATHLETE!"
(drink Mountain Dew)

[jakee 1,593]

Damn! And some people were worried that the Asian relief effort would raise their taxes

Do you want to have an ideagasm?

[pleifer 0]

Quote

Quote

1. Last itme the US was involved in such an expensive war you could buy "War-Bonds"... So surely US citizens will be running to buy the new "Freedom-Bonds"!!??

An excellent way for our government to finance this expenditure. I wish they'd do a full-scale fund-raising effort that involved some sort of bonds. That way, those who support the effort can finance it and those who don't aren't forced to.

Blues,
Dave

Can you see politicians doing a bake sale and a car wash...

bikini car wash with Jannet Reno

_________________________________________
The Angel of Duh has spoke

[SkyDekker 1,465]

Who needs money or a balanced budget, we can kick anybody's ass and that counts for much more!!!

[livendive 8]

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Can you see politicians doing a bake sale and a car wash...

bikini car wash with Jannet Reno

Kissing booth, featuring Bill Clinton
Celebrity Monopoly tournament with Dick Cheney
"Guess his age and win!" with Alan Greenspan
Pin the tail on the [horse] with John Kerry
A "lie-off" between Michael Moore and George Bush
Celebrity "Scruples" games...with any of them



Blues,
Dave

"I AM A PROFESSIONAL EXTREME ATHLETE!"
(drink Mountain Dew)