Posted on 10/14/2005 12:54:17 PM PDT by SierraWasp
U.S. deficit falls to $319 billion
By William L. Watts, MarketWatch Last Update: 3:33 PM ET Oct. 14, 2005
(This is an update to an earlier version of the story, correcting fiscal 2004 revenue and spending figures.)
WASHINGTON (MarketWatch) -- Citing a surge in tax revenues, the federal government on Friday posted a deficit of $319 billion in fiscal 2005, down $94 billion from the previous year's record.
Administration officials said the new Treasury figures vindicated President Bush's economic policies. Critics noted that deficits are expected to persist for years to come and that spending related to Hurricane Katrina is likely to drive up red ink significantly in the current fiscal year.
"Lower taxes and pro-growth economic policies have created millions of jobs and a growing economy has swelled tax revenues over the last year," said Treasury Secretary John Snow, in a printed statement.
The deficit was still the third-highest on record in dollar terms. Measured against the economy, the gap was equal to 2.6% of gross domestic product, above the 40-year average of 2.3%.
The data showed that receipts in fiscal 2005, which ended Sept. 30, totaled $2.154 trillion, up from $1.880 trillion the previous year. Spending also rose, with outlays totaling $2.473 trillion in fiscal 2005. Spending totaled $2.293 trillion in 2004.
A Treasury official said the fiscal 2005 budget figures included around $4 billion in hurricane-related spending, a small chunk of the more than $60 billion approved by Congress in the immediate wake of Hurricane Katrina. Most of that spending is expected to take place in fiscal 2006.
The size of the federal tab for the post-hurricane cleanup and rebuilding effort is yet to be determined. Some lawmakers have estimated the total bill could top $200 billion, while others have argued it's unlikely to be that high.
Regardless, analysts say the deficit is already likely to climb in fiscal 2006.
Analysts at Credit Suisse First Boston on Friday upped their estimate of the fiscal 2006 deficit by $30 billion, to $395 billion. They now see fiscal 2007 posting a deficit of $477 billion.
Lawmakers return Monday from a weeklong recess. The Senate and House are both scheduled this month to push legislation designed to wring around $35 billion in cuts in mandatory spending programs over the next five years.
Top Republicans have also said they will press ahead with measures designed to extend some of Bush's first-term tax cuts, which would reduce revenues by around $70 billion over the same period.
While conservative Republicans have pressed congressional leaders and the White House to offset hurricane-related expenditures with spending cuts, analysts expect little action on that front.
Economist Kathleen Stephansen of Credit Suisse First Boston argued in a research note that any savings wrung out of mandatory spending programs may be outstripped by larger-than-expected costs of measures already in the pipeline, such as the Medicare prescription-drug benefit that will be fully implemented in 2006.
The Bush administration the deficit will be reduced to $260 billion by fiscal 2009, fulfilling Bush's pledge to halve the gap from the White House's preliminary estimate of a $521 billion deficit in fiscal 2004. The White House's long-term projections, however, don't account for the ongoing costs of military operations in Iraq or Afghanistan and don't estimate total hurricane-related spending.
William L. Watts is a reporter for MarketWatch.
Dropping Deficit Ping Thing!!!
Excellent.
It could be better, however, I don't want a surplus either. A surplus means the government took way too much money in.. It should be a 0
It is basically good news, but whoopdie-frickin'-doo, we still have a huge deficit because the aholes in DC don't know how to control their drunken sailor spending ways. And that's on BOTH sides of the aisle, friends. Why are we celebrating this? We should accept it as basically good news, then go hold their feet to the fire where this deficit is concerned.
This will burn the dim's butts! They hate the Reagan way!
It's Bush's fault.....er, nevermind.
What the Bush admin. is practicing is NOT Reaganomics... tax cuts AND spending limits balance budgets. Reagan had to deal with a Democratic Congress - Repubs control everything now. And over $130B in war spending is off budget, as well as various Katrina costs...
You can't get away with predicting huge deficits and declaring victory because the real deficit wasn't as big as the imaginary one.
Don't want to rain on the parade (hopefully it doesn't), but does this include all of the money promised for hurricane and other disaster relief. The drop cited is indeed substantial and calls for a few well earned "I told you so's" to those who oppose tax relief.
If this keeps up we'll have a balanced budget in 3 years.
So, when will Bush pay back the $3 trillion dollars??? I gues s he'll be gone by then...
Somebody should check to see if the shysters are misclassifying money borrowed from China as "revenue".
Um, you should know better than to believe the government's word on its financial condition by now. All sorts of nice big expenses moved off the books can indeed make it look like the deficit is dropping, but it ain't.
We are at War, and deficits are normal during times of War. Having said that, I agree that pork needs to be cut!
LLS
Note: not "citing a reduction in spending" by so-called "limited government" Republicans.
Unless spending is cut, "tax cuts" are simply deferred higher taxes (with interest) in the form of debt dumped on future generations without their permission.
What part of war-fighting do the bridges to nowhere and the "free" pills for greedy geezers vote-buying scams achieve?
Must be no fat left to cut in the budget, as Tom DeLay says.
And we are always "at war", because war is the health of the state.
"$319 billion in fiscal 2005, down $94 billion from the previous year's record. "
That's down 25%, IN ONE YEAR!
Yah, quite a feat if one leaves > $100B simply off the page!
Good, now if Bush and his Republican buddies in Congress could just control their lust for spending...
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