There are both immediate and long term impacts of tax and spending policies.
But.....
Much of Bush I's budget deficit and contribution to the national debt was the result of excessive spending....the primary reason why Perot ran in 1992. The downward trend in deficits/gdp under Clinton came four years into his term and as a result of spending limits that he and the Repub Congress agreed to. Show me any data that suggests it was in any way the impact of Bush I tax/spending policies.
Under Clinton, tax revenues were the hightest in US history and spending was frozen for many domestic programs. The Bush II contribution to the debt is coming more in his second term (and beyond) than the first. Again, show me how the disciplined tax and spending policies of the late 90s is contributing to the exponential growth in the national debt.
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A surge in tax receipts outpaced growth in spending, trimming the size of the federal deficit to $247.7 billion in fiscal 2006 -- the smallest gap in four years, the Treasury Department announced Wednesday.
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The biggest reason for the "low" deficit number is that borrowing from the Social Security trust fund is "off-budget". All reason Presidents have used the SS trust fund to pay for current programs and put an IOU in the trust fund.
But no recent president has raided the SS trust fund anywhere near the level that Bush has.
I will say what I said previously....the annual deficit is not the real issue....it is the accumulated national debt that is the concern of most economists and fiscal analysts. And no president has added to the national debt as much as Bush, with no indicators of any draw down on the debt in the foreseeable future.
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The U.S. government closes the books on fiscal 2006 Saturday, and politicians are likely to trumpet that the federal deficit came in almost $60 billion below projections. Problem is, they won't be using the same math you use.
The nonpartisan Congressional Budget Office has projected that the federal deficit for the fiscal year ending Sept. 30 will total around $260 billion, aided by a surge in revenues. That's $58 billion lower than last year's deficit and about $77 billion lower than projections at the beginning of the fiscal year.
Great news? Budget experts in Washington and on Wall Street say it's a welcome development, but misleading. Washington's funny math excludes the Social Security trust fund, which is running a $177 billion surplus this year. Washington spends it, but doesn't count it as spending. It's officially listed as "off-budget" borrowing.
"In practice, all the money Washington collects goes into the same pot and gets spent the same. On paper, we say we'll pay Social Security back later," said Brian Riedl, chief budget analyst for the Heritage Foundation, a conservative research center.
So the deficit is actually about $437 billion, the CBO calculates: the $260 billion official deficit plus the $177 billion borrowed from the trust fund. Since the money is "borrowed," it adds to the gross federal debt, which is expected to reach about $8.5 trillion by Jan. 1.
This is why New York investment bank Goldman Sachs & Co. issued a dour report Sept. 22 titled "The U.S. Budget Outlook: No Lasting Improvement."
Spending trust-fund money to mask the true size of the federal deficit is a longtime Washington gimmick, but even so, Heritage calculates that the Bush administration and the Republican-led Congress have increased government spending by 45 percent since 2001. Heritage uses spending numbers from the White House Office of Management and Budget.
Federal spending increased by 9 percent in fiscal 2006, the biggest jump since 1990. It's risen sharply for education, agriculture and several nondefense programs as well as for the war on terrorism and homeland security.
"It's really been a guns-and-butter spending spree," Riedl said. "Of all the federal spending increases since 2001, defense and homeland security combined are responsible for less than a third."
Heritage calculates that discretionary spending, excluding defense and homeland security, has increased by 7 percent annually during the Bush presidency. That nearly doubles the 4.2 percent annual growth under President Clinton.
The current spending increases appear less dramatic, however, when they're viewed as a percentage of gross domestic product, the total value of U.S. goods and services produced in a year. In its midyear review, the White House projected fiscal 2006 spending in the ballpark of 20 percent of the GDP. That's about the same as it was for most of the 1990s, although up sharply from 18.4 percent in 2000.
"We're in a situation where the immediate cash budget isn't the issue. People
shouldn't focus too much on that," said Robert Bixby, the executive director of the Concord Coalition, a bipartisan grassroots organization that advocates balanced federal budgets. "The real issue we need to start paying more attention to is what sort of enormous balloon payment are we setting ourselves up for in the future."
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http://www.realcities.com/mld/krwashington/15632221.htm
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