The nonpartisan Congressional Budget Office (CBO) in late January announced that the federal deficit is expected to climb to $477 billion this year, up from $375 billion last year. It also estimated that, in the next 10 years, the government will accumulate nearly $2.4 trillion in additional debt. A later report revealed that in the first quarter of this year, the budget deficit totaled $126 billion as government spending outpaced tax receipts. Legislators on both sides of Congress have expressed concern about the budget deficits, but unless they put the brakes on spending there is apparently no way to go but up considering the cost of the war in Iraq, passage of the law that added a prescription drug benefit with predicted initial costs of $400 billion and enacted tax-cut legislation.
• In early February President Bush proposed a $2.4 trillion budget for fiscal year 2005 that would reduce spending for about half of the government agencies but, at the same time, would boost spending to near-record levels for anti-terrorism and military programs. Bush’s budget would eliminate or cut 128 programs as part of his plan to reduce the budget deficit this year–anywhere from predicted figures of $477 billion by the CBO and $521 billion by the Administration–and by 50 percent within five years.
More In Regulations and Government
