“Surprising” Economic News …
Leave it to the Times to take positive economic news and put a negative spin on it.
What starts out as subtle needling i.e. Bush announced the news versus a lower level official …
Bush himself announced the deficit — a task that has in the past been left to lower-ranking administration officials. The figures show that the deficit for the budget year ending Sept. 30 will be $296 billion — much better than the $423 billion that Bush predicted in February and a slight improvement over 2005.
Bush said the improvement is due to tax cuts he pushed in 2001 and 2003 and his clampdown on domestic agencies funded by Congress.
”These tax cuts left nearly $1.1 trillion in the hands of American workers and families and small business owners. And they used this money to help fuel an economic resurgence that’s now in its 18th quarter,” Bush said. ”Economic growth fueled by tax relief has sent our tax revenues soaring.”
Impressive profits and big income gains by the wealthy are largely responsible for the surge in revenues and, in turn, the deficit drop.
Proceeds into growing negativity …
However, the results are less impressive when compared to the $318 billion deficit posted last fall for fiscal 2005. Despite strong revenues, the high costs of the Iraq war and Gulf Coast hurricane relief have weighed on the deficit — as have higher interest payments paid on the national debt.
”The 2006 deficit may be a bit lower, but it represents a $600 billion swing from the surplus projected in 2001. And a deficit of $296 billion is still a large deficit. In nominal terms, its one of the four largest in history,” said Rep. John Spratt Jr. of South Carolina, top Democrat on the Budget Committee.
Ending in a parting blast …
Bush has had few opportunities to boast about the deficit over the course of his time in office. He inherited in 2001 a surplus estimated by both White House and congressional forecasters at $5.6 trillion over the subsequent decade, and it quickly dwindled.
Those faulty estimates assumed the late-1990s revenue boom — fueled by the stock market and dot.com booms — would continue. But that bubble burst, and a recession and the Sept. 11, 2001, terrorist attacks started a flow of red ink. Several rounds of tax cuts, including Bush’s signature $1.35 trillion tax cut in 2001, also contributed to the return to deficits four years ago after four years of budget surpluses.
Even before the release of the figures, critics poked at the White House figures, citing, for example, how they are at odds from Bush’s original budget released in 2001, which predicted a $305 billion surplus for the current year, even after accounting for tax cuts.
Some budget experts say the steep rise in tax receipts looks more impressive than it really is since revenues are bouncing back from a three-year decline during Bush’s first term, drops not seen since the Great Depression.
Man, just think what the headlines and story would have been if the results had been what many liberals were giving as doomesday economic projections when the tax cuts were first proposed!
Now I’m not saying these results shouldn’t be taken with a grain of salt, but couldn’t there be a bit more acknowledgment that the tax cut approach taken by the Bush administration has garnered positive economic results?