Posted on 04/30/2002 9:15:37 AM PDT by hattend
UNCLE SAM IN HOCK:
Treasury Needs $1 Billion to Cover Shortfall
Associated Press
Published 04. 29. 02 at 17:13 Sierra Time
WASHINGTON — The government, in a sharp reversal of earlier borrowing plans, said Monday that it plans to tap $1 billion from the credit markets this quarter to compensate for lower-than-expected income-tax payments and to cover the cost of this year's economic stimulus package. The Treasury Department projected in January that it would actually retire a big chunk of the national debt — $89 billion — rather than increase its borrowing in the April-June quarter.
"The stimulus package enacted in March accounts for one-fourth of the increase in borrowing," the Treasury said. "The remaining change is due primarily to lower-than-expected 2001 tax receipts received in April and early May."
It marked the first time since 1995 that the government needed to borrow in the April-June quarter. That quarter is generally flush with cash because of a flood of income tax payments flowing in Treasury's coffers.
"Forecast errors of this magnitude are not surprising given total expected revenues for the year of $2 trillion," a Treasury spokeswoman said. "Cash flows are highly volatile following the April 15 tax date."
The likely sources of forecast errors in tax receipts are: lower wage income; lower capital gains income; lower corporate taxes; or lower lower interest income, she said.
Treasury officials said the need to borrow in the April-June reflects a short-term cash squeeze and doesn't signal a long-term move from budget surplus to deficit.
Budget experts predict the United States will record a deficit for this entire fiscal year, which has not happened since 1997.
The Bush administration has blamed the return of deficits on a recession that began in March 2001 and the costs of waging war in Afghanistan and battling terrorism at home. But Democrats said it was the 10-year, $1.35 trillion tax cut that Bush pushed through Congress in the spring for the budget's likely return to red ink.
Disappointing tax collections mean this year's federal deficit could soar to $100 billion or beyond, private and government analysts recently estimated.
G. William Hoagland, GOP staff director of the Senate Budget Committee, last week said he was projecting that the government would collect about $891 billion in individual income taxes this fiscal year.
That is down from the $950 billion that congressional and White House analysts expected — which is nearly half the $2 trillion in overall revenue the government pockets each year.
For all of fiscal 2001, which ended Sept. 30, the government had a budget surplus of $127 billion, about half the previous year's record total of $237 billion. It was the first time since 1992 that the government's balance sheet did not show an improvement.
Treasury also said Monday that it expects to borrow $55 billion in the July-September quarter.
There is a word that I would like to acquaint government workers with. That word is "layoff". How about a %10 "reduction in force" for the government payroll? Just think of the cost savings!
Eliminating the income tax and IRS and implementing a national retail sales tax would also re-patriate a lot of $... and bring in a ton more.
Find out about the national retail sales tax bill that's in Congress as we speak.
Interesting choice of words.
Other choices:
steal
make disappear
waste
remove from the private sector
pass to other nations as a form of global socialization
make up your own...but "pockets" is very apt. Must be because Bush is the president. Clinton/Gore wouldn't even get a story like this out of the AP. It would have been spiked.
I'm not saying it isn't bad news, just noticing the little "spin" AP puts on it.
No disagreement from me. They forced the military to work with nearly 65% manning when I was in.
I don't see why the federal workforce couldn't be trimmed that much as well. How many people are employed in each Senate and House office alone? Ten or more? At $40K+ per person? Cut the staff in half and you could save over 20 million bucks a year in salary....then close there offices down. Overhead would probably gets you another 20 mill a year. That's 40 million a year in saving in just the legislative offices...imagine taking a look at the whole branch!
Just preaching to the choir, I know, I know.
Anyway, just a thought. I know it's as likely as snow in July, but what the heck.
They need to get there before California rolls in asking for a loan over 10 Billion. I am sure Wall Street would prefer to loan money to us here in California rather than Wahington!! /sarcasm
BTW, what is the current budget for this WoD?
Make the congress critters fly the airlines though. I know Hillary uses private jets...her SUV ran over a guy on their way onto the ramp.
What, the ruling class elite give up some of their princely perks? The "elected" nobility who lead the great unwashed masses must be pampered and protected. After all, they are entitled.
Richard W.
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