US President George W. Bush's new tax and spending plan would produce deficits of US$2.75 trillion over the next decade, the Congressional Budget Office (CBO) reported on Friday in the first detailed analysis of the White House budget.
If there were no changes in taxes and if spending increased only at the rate of inflation, the deficit would be about US$2 trillion over the next 10 years, the budget office reported on Friday. But the new estimate is US$737 billion higher, primarily reflecting Bush's desire to make permanent the tax cuts due to expire by 2011.
Three years ago, the budget office forecast budget surpluses totaling US$5.6 trillion for the 10-year period ending in 2011.
The budget office predicts that this year's deficit will be US$478 billion, lower than Bush's estimate of US$521 billion, and it estimates that the deficit will be cut almost in half in three years, to US$242 billion.
The forecasts by the budget office, a nonpartisan arm of Congress, indicate, however, that deficits will begin rising again toward the end of the coming decade, after the Bush tax cuts take full effect.
And like the administration's budget, the budget office estimates exclude some large expenses like the cost of operations in Iraq and other issues that both parties say must be dealt with, including reducing the number of people forced to pay the alternative minimum tax.
The most revealing part of the office's projection is the outlook from 2010 to 2014.
Deficits would total almost US$1.4 trillion over that period, and the annual deficit will be US$289 billion, and growing larger, as the nation heads into a tidal wave of soaring costs from Social Security payouts and Medicare claims as more baby boomers reach retirement age.
Republicans argue that 10-year projections are flawed and unreliable and that the tax cuts were needed to get the economy going in the short-term while encouraging job growth and new business investment in later years.
Democrats contend that the White House wants to use five-year numbers to hide the huge and continuing deficits in later years.
They argue that the tax cuts will squander resources needed to address a multitude of problems facing the country, including domestic security and the growing number of Social Security claims.
"As bad as these numbers are, they are actually worse because they omit significant costs that the president has omitted from his budget," said Representative John Spratt of South Carolina, the ranking Democrat on the House Budget Committee.
In addition to operations in Iraq and Afghanistan, which could cost US$50 billion next year, the budget does not include a provision for fixing the alternative minimum tax, a change that will probably drain US$600 billion from the budget over the next decade, Spratt said.
By making only five-year projections, Spratt said, the Bush plan "left most people thinking we will cut the deficit in half and it will keep on declining. But in truth, we see in the CBO projections that the deficit gets worse over the long term. We simply don't have a plan to eradicate it."
Chad Kolton, spokesman for the Office of Management and Budget at the White House, said that administration officials are pleased that the CBO endorsed White House forecasts of a halved deficit within five years. But he dismissed concerns about the large deficits predicted for later years.
"Once you get beyond that five-year window, the numbers, even by the CBO's account, become notoriously inaccurate," Kolton said. "Even CBO would admit we don't honestly know what these numbers will look like 10 years from now."
US President Donald Trump yesterday announced sweeping "reciprocal tariffs" on US trading partners, including a 32 percent tax on goods from Taiwan that is set to take effect on Wednesday. At a Rose Garden event, Trump declared a 10 percent baseline tax on imports from all countries, with the White House saying it would take effect on Saturday. Countries with larger trade surpluses with the US would face higher duties beginning on Wednesday, including Taiwan (32 percent), China (34 percent), Japan (24 percent), South Korea (25 percent), Vietnam (46 percent) and Thailand (36 percent). Canada and Mexico, the two largest US trading
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
RSS