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.
Only $0.3 trillion in the hole and still three months to go. We should celebrate.
A billion here, a billion there, and pretty soon you're talking real money :)
Reaganomics is when the economy grows faster than the government, not the other way around.
The wars in total - Iraq, Afghanistan, increased base security around the world - have cost a total of $280-300B FY01 through FY05 inclusive.
For comparison, during that timeframe interest on the treasury bills with which yesterday's pork was paid for cost $1,700B.
Oh, the gnashing of teeth will commence immediately.
Doesn't seem possible since many 'conservatives' are convinced the President is bankrupting us.
Uh, this is a good thing?
"Only $319 billion"
Just wait till the Katrina spending gets appropriated. And the new pill entitlements kick in.
Sad what supposed Conservatives will tolerate.
Your complete resistance to knowledge of any kind is daunting.
(1) We don't borrow money from China.
(2) Treasury bonds are liabilities, not revenue, and are not classed as revenue.
Does anyone have the percentage of GDP compared to the deficit since Reagan? I used to have those numbers and as I remember, this is as low as we've been in years.
I don't think it will take that long. At the very least, the major parts of the dividend and income tax cuts which expire in 2009 and 2011 respectively will not be extended.
If the Dems can restrain themselves from nominating another unelectable moonbat, they will probably have the White House back by 2012 at the latest - and we will in all likelyhood get socialist healthcare with a 48% top income bracket to pay for it.
Go back to Mars.
Is it always raining where you are? Even on sunny days.
Seems I read somewhere (maybe someone can point me to a source) that most EUropean governments are running twice-to-three times the US deficit.... Seems that when we approach "their" deficits, they complain that "we" jeapordize the world's economic stability....
I agree. The spending (on pork) needs to stop (especially if we want true Reganonmics). An occasional veto would've been nice...
We ARE accepting it as good news and will "hold their feet to the fire" to cut more spending later. Can't do anything on a Friday. What's your problem with some of us woohooing a little good news? We've had precious little of it lately.
Chinda holds about 8% of US Treasury debt.
Yeah, how dare that nasty Bush spend our tax dollars on a war we didn't start and how dare he do anything to rebuild after Katrina?!?!?!?
Wail....my stock is down ($00.32 ) !
You are correct. War and natural disaster recovery costs are hardly informative about the year to year gov't spending.
It must drive the Left crazy that reducing taxes actually increases tax revenue!
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