9/11 - The Presidential Cover-up Continues!

Estimate for '04 Deficit Is Increased to $480 Billion
By DAVID STOUT


WASHINGTON, Aug. 26 ?- The federal government will run at a record $480 billion deficit in the next fiscal year, $5 billion more than the Bush administration had predicted, the nonpartisan Congressional Budget Office said today. But the office saw the possibility of enormous deficits in the years ahead.

On paper, at least, federal deficits could begin to decline after next year, the office said. But it said that under the most optimistic projections, they could total nearly $1.4 trillion over the next 10 years.

But the $1.4 trillion does not take into account the cost of reconstruction in Iraq. And based on some changes that are highly probable ?- enactment of a prescription drug program under Medicare, for example ?- budget deficits could total $5 trillion over the next 10 years, the Congressional Budget Office said.

Only last month, the administration had foreseen a $475 billion deficit for the 2004 fiscal year, which begins Oct. 1. Since budget-watchers from both political parties were anticipating that the budget office might estimate next year's deficit at $500 billion or more, today's announcement that it sees a $480 billion deficit for 2004 could be heartening to President Bush and his allies, up to a point.

But Democrats have been criticizing Mr. Bush and his Republican allies on Capitol Hill for months for pushing through a series of tax cuts. Democrats contend that most of those cuts are fiscally irresponsible, amounting to favors for those already well off, and are likely to burden future generations with debt.

Typical of the Democrats' stance is the position taken by Senator Kent Conrad of North Dakota, senior minority member on the Senate Budget Committee.

"Sadly, the massive 10-year tax cut of 2001, benefiting primarily the wealthiest, left the nation ill-prepared to deal with the economic downturn and war on terrorism that would follow," Mr. Conrad said in a statement. "We now again face deficits as far as the eye can see."

Mr. Bush and Republicans are sure to point to a section in the Congressional Budget Office report that states: "The economy now seems poised for a more sustained recovery. C.B.O. anticipates that gross domestic product will rise by nearly 4 percent in calendar year 2004 after growing by less than 2 percent in the first half of this year."

Mr. Bush and other Republicans have insisted that letting Americans keep ?- and spend ?- more of their hard-earned money by cutting taxes is the right way to reinvigorate the economy.

The budget office's projections for the next 10 years were marked with caveats and qualifiers that said, in essence, that no one can be sure what the big picture will look like in the years ahead. But the budget office's report does lay out certain alternative scenarios that, while not certain, are entirely realistic, even probable.

As for the projected $1.4 trillion deficit for the next 10 years, "the baseline does not include possible policy changes such as the introduction of a prescription drug program for Medicare beneficiaries," the Congressional Budget Office report noted.

But both houses of Congress have already voted for prescription drug plans under Medicare, anticipating expenditures of $400 billion over the first 10 years, and President Bush is eager to sign a plan into law, once the House and the Senate settle their differences on the details.

And since members of the baby boom generation are nearing retirement, as the Congressional Budget Office noted, they will account for far more federal spending in the years ahead, not just through Medicare but Social Security and other benefit programs.

Another factor is the "sunset" provision built into some tax cuts recently enacted by the Republican-controlled Congress. To placate some lawmakers (Republicans as well as Democrats) worried about huge deficits in the years ahead, some tax cuts are supposed to expire a decade or so from now.

But many politicians have said it is unrealistic, even cynical, to say that lawmakers will have the political courage years from now to take back tax cuts to which Americans will have grown accustomed.

Perhaps the biggest caveat of all, and it is a theme that can be gleaned from the otherwise dry words in the report, is that no one can truly predict what will happen to the economy.

As recently as early 2000, some economic experts foresaw surpluses for many years ahead. Then the stock market collapsed, the country was attacked by terrorists on Sept. 11, 2001, and costly wars unfolded in Afghanistan and Iraq.