New analysis of Bush budget predicts deficit, not surplus

[Joanne98]

New analysis of Bush budget predicts deficit, not surplus
By Andrew Taylor
Associated Press
WASHINGTON - President Bush's proposed federal budget would probably not produce its advertised surplus of $61 billion in five years, according to new estimates from the Congressional Budget Office.

Instead, Bush's February budget plan would produce a $9 billion deficit by 2012 if it were to be enacted, CBO maintains.

The main reason for the differences between the two estimates is a more optimistic White House revenue projection. CBO sees revenues $119 billion lower in 2012 than does the administration's Office of Management and Budget.

But in a federal budget totaling about $3 trillion, the differences between the CBO and White House estimates are quite modest. Underscoring the difficulty of longer-term budget projections, CBO says there's an equal chance that the Bush budget would generate a surplus in 2012.

The new estimate is largely an academic exercise since the Democratic-controlled Congress is mostly ignoring Bush's budget and Democratic leaders have said major initiatives are dead on arrival, such as treating health insurance benefits as taxable income.

That Bush proposal, coupled with a standard tax deduction for those who buy health insurance, amounts to a big tax increase -- totaling $557 billion over 10 years -- according to congressional estimators. Bush's budget assumes the two proposals combine to cut taxes.
http://www.mercurynews.com/mld/mercurynews/news/politics/16827878.htm