WASHINGTON – U.S. Rep. John Spratt (D-SC) today issued the following statement on CBO’s new budget forecast.
“The Congressional Budget Office (CBO) today released an Update of its Budget and Economic Outlook. By CBO’s reckoning, the federal government in 2003 will run the largest deficit in its history, $401 billion. That deficit will not fade away as the economy recovers, but will keep mounting and in 2004 will set another record, a deficit of $480 billion. According to CBO, the budget forecast has deteriorated by $2.3 trillion just since CBO’s last forecast in March.
“CBO’s forecast is the latest confirmation that the budget deficits are here to stay and will worsen without major changes in policy. Every CBO forecast since May 2001 has projected lower surpluses and higher deficits than the previous forecast. Though the policies of the Bush Administration have played a major part in this fiscal reversal, the Administration has no plan to solve it and makes matters worse by calling for $878 billion in additional tax cuts in its Mid-Session Review issued in mid-July.
“As bad as CBO’s forecast appears, the true extent of the problem is even worse. CBO’s projections are “baseline” estimates that do not reflect the cost of policies likely to be passed but not yet enacted, such as Medicare prescription drug coverage. When these policy changes are made, the unified budget sinks into deficits that exceed $295 billion for as far out as CBO forecasts. The surplus that President Bush inherited when he took office, estimated at $5.6 trillion, becomes instead a cumulative deficit of $3.3 trillion. At a time when the nation should be saving for the retirement of the baby boomers, budget policies are saddling us with long-term debt. The time is long overdue for the Bush Administration to recognize the problem, acknowledge its responsibility, and come forth with solutions.”