WASHINGTON – U.S. Rep. John Spratt (D-SC) issued the following statement in reaction to today’s new budget forecast by the Congressional Budget Office (CBO).
“Having racked up three of the largest deficits in history, the Bush Administration is well on its way to a fourth, and years away from reducing the deficit by half, or by any appreciable amount, according to CBO. Republicans control the House, the Senate, and the White House, but they can’t control the budget, and they can’t escape responsibility for its dismal condition. On their watch, a ten-year surplus of $5.6 trillion has become a ten-year deficit of $2.6 trillion, even before adjusting the CBO forecast for additional Republican policies. When adjustments are made to reflect the cost of Administration policies, this number grows to $4.6 trillion, a reversal of more than $10 trillion. Terrorism and recession have taken their toll, but oversized tax cuts have played a major part in this fiscal reversal.
“CBO projects a deficit of $855 billion over the period 2006-2015, but its projection grossly understates the deficit because of the assumptions CBO must make. CBO must assume that when the Bush tax cuts expire, they will not be renewed; and that when the alternative minimum tax raises the taxes of 30 million taxpayers, it will not be fixed. CBO must also assume no additional cost for the war in Iraq and Afghanistan in future years because there is no new funding in the budget for 2005 to be carried forward, even though an $80 billion supplemental is imminent. CBO must also disregard what the President has said about privatization of Social Security, even though his plan would add approximately $2 trillion to the deficit over the next ten years. When adjusted for these policies and the associated interest costs, the 2006-2015 deficit grows to $6.1 trillion.
“This forecast does not show any meaningful improvement since CBO’s last forecast, issued in September 2004. The September forecast assumed that $115 billion in supplemental funding for Iraq and Afghanistan would be repeated annually — adding about $1.4 trillion over ten years to that deficit forecast. Today’s forecast does not project supplemental spending for Iraq and Afghanistan; and as a result, it appears less dire than September. But when adjusted to include a reasonable measure of war-related spending, there is no appreciable improvement.
“The Administration remains in denial about these fiscal results. Faced with record deficits, the Bush Administration calls the situation ‘manageable,’ while proposing costly initiatives that make the problem worse. In two weeks the Administration will issue a budget that claims to cut the deficit by half in 2009, but which will fail to include the cost of Social Security privatization, the cost of the war in Iraq after 2005, or the full revenue impact of its tax agenda. Because the Administration’s budget will omit the cost of many of its own policies, its claims about deficit reduction strain credibility.”