Today, the Congressional Budget Office (CBO) reported that the U.S. budget deficit will reach $337 billion this year, and it is likely to increase. The Cato Institute's budget experts are available for comment.
Chris Edwards, Cato's director of tax policy studies:
"The new CBO figures show that strong economic growth is President Bush's best friend on the budget front, and that inability to control spending growth his greatest enemy.
"On the tax side, the strong economy is causing federal revenues to surge. Revenues increased 14.6 percent in fiscal 2005 and are expected to increase 7.3 percent in 2006. The deficit problem is not caused by a shortage of tax revenues. Even with the extension of all the Bush tax cuts and relief from the alternative minimum tax, revenues will slowly rise to near their historic share of gross domestic product in the long-run.
"President Bush and Republicans in Congress keep claiming that they are getting spending under control and that spending growth rates are falling. That is simply not correct. The 8.0 percent growth rate in 2006, and massive 43 percent spending increase the past five years (FY2001 to FY2006), shows that federal government growth is completely out-of-control under the Republicans.
"President Bush's goal of cutting the deficit in half is not good enough. He should lay out a plan to bring the federal deficit down to zero by the end of the decade by cutting spending. A detailed plan to do just that is in Downsizing the Federal Government, which proposes a balanced array of cuts to defense, non-defense, and entitlement programs."
- Downsizing the Federal Government, by Chris Edwards.
- List of proposed Federal budget cuts from Downsizing the Federal Government.
- "Potomac Fever," by Chris Edwards, Nationalreview.com, December 12, 2005.
Stephen Slivinski, Cato's director of budget studies:
"The new CBO numbers show that Bush is still the biggest spending president since Lyndon Johnson. In fact, the growth rate of the 2006 budget was, even after adjusting for inflation, one of the highest rates of growth in 15 years. All of this at a time when Republicans are trying to claim they are the party of small government."
"Total federal outlays rose 7.9 percent in fiscal 2005 and are expected to rise 7.2 percent in 2006. However, the CBO points out that the figure for 2006 does not include another $20 billion to be requested for Iraq in coming months. With that extra spending, outlays will increase by 8.0 percent in 2006 -- a higher growth rate than last year."
"In order for Bush to be successful in meeting his target of cutting the deficit in half as a percentage of GDP, spending would have to stay at 4% growth each year until the end of his term. But under Bush and a Republican Congress, spending has averaged over 7 percent growth every year since 2001. There has yet to be any sign that Republicans are willing to really do what it takes to get the budget under control."
- "The Grand Old Spending Party: How Republicans Became Big Spenders," by Stephen Slivinski, Cato Policy Analysis no. 543, May 3, 2005.
- "Bush Beats Johnson: Comparing the Presidents," by Stephen Slivinski, Cato's Tax & Budget Bulletin, October 2005.