Saturday, June 17, 2006

Federal Budget Deficit Obfuscation

How is George W Bush doing with regard to his pledge to halve the budget deficit within 5 years. Hugh Hewitt had an interview Friday (June 16) in which he agreed that the goal might even be reached next year. That would be amazing, if true, and just one more unreported massive victory for Bush. So I started the research. For those who hate numbers, the following will be boring. For those who have major distrust for MSM and the Congression Budget Office, it will be hugely illuminating.

Here are the actual estimates from CBO

Estimate of the President’s Budget for 2006 and future years
_________actual__without SS surplus
2005 deficit...$318........$493
2006 deficit...$371........$551
2007 deficit...$335........$527
2008 deficit...$236........$448
2009 deficit...$194........$422

Article #1 From Tribune news services....Published June 13, 2006

Federal Budget Deficit Widens
`Calendar quirks' add to shortfall; revenue continues to increase

WASHINGTON -- The Treasury Department said Monday that the budget deficit widened to $42.83 billion in May from a year earlier, a larger gap than economists expected, as spending outpaced rising revenue.
The Congressional Budget Office said the shortfall could be as low as $300 billion this fiscal year, compared to the White House's first estimate of $423 billion. Last fiscal year, the budget gap was $319 billion.

What should the headline be here? Defict Widens? Or Defict Dropping?

Believe it or not, CBS News got it right.

Budget Deficit Shows Improvement
Shortfall Down 16.7 Percent From 2005 Through First 8 Months Of Fiscal Year

WASHINGTON, June 12, 2006
According to the Treasury Department, the federal budget deficit is running well behind last year's pace. (AP)
The $227 billion total deficit for the past eight months puts the government on track to turn in a substantially smaller deficit this year than last year, when the red ink totaled $319 billion for the full year, the third-highest amount of red ink in dollar terms.

The record deficit was $413 billion set in 2004.

Now, its a bit tough to reconcile all these numbers, but it would appear that everyone was using the net deficit as the way to keep score on cutting the deficit in half. It would be easy to argue that we should all be paying more attention to the deficit including SS surplus, but once the ground rules are set, the only way to hold someone accountable is to use the rulebook.

In order to meet the goal, the deficit would have to be half of $413 billion in 2009. The current projection for this year is $300 B. The origional CBO projection for 2007 was $36 B less than 2006. That would take us to $264 B. That is surely within striking distance of halving the $413 next year. If the Republicans do their job with the budget, and if the economy continues to outperform the projections, we could hit the goal two years early.

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