The Bush administration has repeatedly vowed to acheive the very meager budgetary goal of “halving the deficit” in 5 years. Bush himself made such a promise in his state of the union address in January.
Today the CBO released its mid-year update on the budget outlook for the next ten years. Here are the CBO’s estimates of the US budget deficit:
2004: $422bn, or 3.6% of GDP
2009: $312bn, or 2.1% of GDP
Halving the deficit in 5 years was a miserable, puny, girlie-man goal. Yet the Bush admininstration can’t even meet this goal, according to the CBO’s projections.
The worst part, however, is that the CBO’s projections of the deficit are certainly far too low. The CBO estimate assumes:
- the tax cuts set to expire in 2005 are not renewed and do actually expire.
- there is no additional spending in Iraq or Afghanistan after 2005.
- The AMT is not reformed in any way, so that tens of millions of households must pay it by the end of the decade.
A more realistic estimate should add $100 to $200 bn to the budget deficit every year from now into the future.
Note one last thing: the projections that the CBO has made for the deficits for the period 2004-09 have gotten steadily worse, even over the past year. This past year, you might recall, is a period in which “America’s economy is strong and growing stronger.”
CBO projected total deficits, 2004-09:
As of January 2003: $40 bn
As of August 2003: $1,616 bn
As of January 2004: $1,921 bn
As of September 2004: $2,006 bn
What’s the Bush administration’s excuse for the projected deficits getting steadily worse? I’m curious.