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House Budget Democrats Say Budget Reflects 'Misguided Priorities'

FEB. 6, 2006

House Budget Democrats Say Budget Reflects 'Misguided Priorities'

DATED FEB. 6, 2006
DOCUMENT ATTRIBUTES
  • Institutional Authors
    House of Representatives
    Budget Committee
    Democratic Caucus
  • Subject Area/Tax Topics
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2006-2332
  • Tax Analysts Electronic Citation
    2006 TNT 25-60

 

February 6, 2006

 

 

This Administration's policies continue to take the budget in the wrong direction. The 2006 budget deficit will be $423 billion, the largest in history. Over the last four years, the Administration has produced the four largest deficits in history. Meanwhile, the budget again reflects misplaced priorities, imposing harmful cuts on important services for average Americans while protecting benefits for narrow interests and proposing new tax cuts targeted at the most fortunate.

            OMB Deficit Projections, in Billions of Dollars

 

 

              2006 2007 2008 2009 2010 2011 2007-2011

 

 

 Unified      -423 -354 -223 -208 -183 -205    -1,596

 

 

 On-          -602 -543 -436 -437 -408 -415    -2,841

 

 Budget

 

 

The Largest Deficit in History -- The Administration estimates that the deficit for 2006 will be $423 billion, the largest in history. This deficit is $105 billion larger than the 2005 deficit of $318 billion. The deficit for 2006 without using the Social Security surplus is even higher, over $600 billion. Even if the Administration's 2006 estimate proves to be too large, it is clear that the deficits for 2003, 2004, 2005, and 2006 are the four largest in American history.

Budget Deterioration Under This Administration Totals $8.9 Trillion -- When this Administration took office, it inherited a projected ten-year surplus (2002-2011) of $5.6 trillion. Based on a realistic estimate of the President's policies, that surplus has now become a $3.3 trillion deficit over the same period of time, a dramatic fiscal reversal of $8.9 trillion.

Administration Protects Narrow Interests While Cutting Services for Average Americans -- The Administration's budget makes shortsighted cuts to investments and services that typical Americans care about. The budget cuts funding for education, Medicare, and Medicaid, and increases fees paid by our veterans and Medicare premiums paid by some seniors. At the same time, the budget protects provisions benefitting narrow interests -- such as $10 billion in unnecessary Medicare subsidies to preferred provider organizations. It also includes another round of large tax cuts targeted primarily to the most fortunate among us.

Administration Budget Promises: Less Than Meets the Eye -- The budget fails to live up to some of the high- profile claims made by this Administration. For example, the Administration claims to be committed to providing affordable health care for Americans, but this budget includes increases in Medicare premiums, more cuts to Medicaid and Medicare, and a misguided plan for health savings accounts that will shift more of the cost of health care onto individual consumers. The budget also shows that there is less than meets the eye to the Administration's American Competitiveness Initiative. Of the $5.9 billion provided for this initiative for 2007, more than three-quarters of the total goes to an extension of the existing research and development tax credit. The President also claims that he is a strong supporter of math and science education programs. At the same time, though, his budget cuts the funding that helps students attend college.

True Picture Is Even Worse Than Administration's Numbers Reveal -- The Administration's budget does not reveal the full extent of the deficit problem that its policies have created.

  • First, the Administration's budget shows no deficit figures at all after the first five years, thus masking the $1.5 trillion deficit impact (2012-2016) of the Administration's tax cuts and the $631 billion deficit impact of the Administration's Social Security privatization plan over the same period of time.

  • Second, the budget omits a realistic estimate of the following costs:

    • full repair of the AMT, which increases the deficit by $844 billion over the next ten years if the Administration's tax cuts are extended;

    • realistic costs for ongoing operations in Iraq and Afghanistan, which total $298 billion over the next ten years beyond the amounts included in the President's budget, according to a Congressional Budget Office (CBO) scenario.

  • When these omitted costs, including debt service, are factored into the estimates, the deficit over the next ten years (2007- 2016) is $3.9 trillion, with triple-digit deficits never falling below $294 billion per year.

 

         Deficits Much Worse than Administration Acknowledges

 

 

                 Unified Deficit in Billions of Dollars

 

 

                     2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

 

 

 Bush Budget         -354 -223 -208 -183 -205

 

 

 Bush Budget

 

 Including Omitted   -386 -308 -313 -294 -329 -342 -401 -442 -484 -556

 

 Items
DOCUMENT ATTRIBUTES
  • Institutional Authors
    House of Representatives
    Budget Committee
    Democratic Caucus
  • Subject Area/Tax Topics
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2006-2332
  • Tax Analysts Electronic Citation
    2006 TNT 25-60
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