Monday, November 13, 2006
Carter's point is that there never was a surplus, and to the extent that you are trying to forecast the behavior of a Congress awash in extraordinary revenues from the tech bubble of the late 1990's, he's right. But the Medicare prescription-drug benefits were not a necessary expenditure, and disaster relief has been pork-laden. Thus Carter -- a former Bush Treasury official -- opines
Subsequent tax cuts further reduced projected federal revenue, bringing total tax relief under President Bush to $1.8 trillion over ten years. This accounts for one-fifth of the $8.5 trillion swing.
Yet even this orchestrated tax relief pales in comparison to the impact the recession, technical adjustments, and other developments had on the budget projections. These factors trimmed nearly $2 trillion from projected revenue while boosting projected outlays $519 billion. This accounts for 29.4 percent of the swing.
Still, all of this explains barely half the swing. The remaining half is a result of the spending Congress enacted over the past six years to bolster national defense, fight the war on terror, provide seniors with Medicare prescription-drug benefits, confer disaster relief, and fund a myriad of other programs.
So, what do the clues reveal about the missing $5.6 trillion surplus? 1) It never existed. 2) It never would have existed. 3) Policymakers never intended for it to exist.True, and 3) is the problem and one reason why the Democrats now hold Congress.