75% of revenue increases reducing deficit are temporay

[papau]

Why did the media not notice that the budget office predicted the deficit would remain above $300 billon a year through 2010 and then, if the Bush tax cuts are allowed to expire , perhaps drop to only $100 billion per year from 2012 to 2016?


http://www.latimes.com/news/nationworld/nation/la-na-budget16aug16,0,6766667.story?track=tottext

THE NATION
Budget Outlook Is Heartened by Tax Windfall
The deficit remains significant, but the GOP says the forecast proves Bush is on the right course. One analyst sees 'a lot of dark clouds.'
By Joel Havemann
Times Staff Writer

August 16, 2005

WASHINGTON — A windfall of tax revenue, especially from corporations, has substantially brightened the short-term budget outlook, but beyond this year the deficit is still an unsolved problem, the Congressional Budget Office reported Monday.

For fiscal year 2005, the budget office forecast a $331-billion deficit, in line with the Bush administration's estimate issued in July. That compares with the $364-billion deficit the budget office forecast in March and the $412 billion the Bush administration estimated in February.<snip>

But Douglas Holtz-Eakin, the budget office's director, estimated that three-quarters of the revenue increases driving down the 2005 deficit were temporary in nature and not built into the economy.

James R. Horney, a budget expert at the Center on Budget and Policy Priorities, an independent fiscal policy organization in Washington, said the improving economy could not be responsible for the extra tax revenue because the budget office report did not show the economy gaining strength compared with its March forecast.<snip>

"The sun may be shining for now, but there are a lot of dark clouds on the horizon," said Brookings Institution budget analyst Isabel Sawhill. "The long-term budget picture is bad and getting worse."

[tanyev]

1. This windfall will allow Republican candidates in the 2006

election to trumpet loud and long about how they are bringing down the deficit. (The deficit that they created.) Then they will have to start looking for a new gimmick for 2008.

[agincourt]

2. Again the increased revenue,

is probably from windfall profits in the petroleum industry, not from the joe 6-pack tax payer. The only reason the deficit is lower is from the residual corporate taxes that we have on big business, not from any tax cuts that "lift all boats". Watch them argue that this is from tax cuts when the truth is the increased revenue is from tax cuts the feds DIDN'T make.

[Robert Oak]

3. Enron accounting

alive and strong in the Bush administration. Did they get jobs
after the their other companies folded at the white house?

Great post as usual Papau.