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Skriven 2006-10-12 05:05:00 av Jeff Binkley (1:226/600)
Ärende: Deficit
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http://www.breitbart.com/news/2006/10/11/D8KMJBT81.html

Federal Deficit Now Lowest in 4 Years
Oct 11 2:20 PM US/Eastern
   
By MARTIN CRUTSINGER
AP Economics Writer

WASHINGTON

  
The federal deficit in the budget year that just ended fell to a four- 
year low of $247.7 billion _ a figure President Bush touted Wednesday as 
"proof that pro-growth policies work." 
The deficit for the budget year that ended Sept. 30 was 22.3 percent 
lower than the $318.7 billion imbalance for 2005, handing Bush a welcome 
economic talking point as Republicans battle to hold onto control of 
Congress in the midterm elections. 

Bush called the outcome for Fiscal 2006 a "dramatic reduction" that 
redeemed his 2004 campaign pledge to halve the deficit earlier than his 
original 2009 target date. 

"These numbers show that we have now achieved our goal of cutting the 
federal deficit in half and we've done it three years ahead of 
schedule," Bush told reporters at a Rose Garden news conference. 

The pledge to cut the deficit in half was based on the administration's 
forecast that the 2004 deficit would hit $521 billion, a figure that 
proved to be too pessimistic by more than $100 billion. However, the 
administration has continued to use the forecast number as its benchmark 
for deficit reduction. 

Bush said he would continue to urge Congress to make permanent his first-
term tax cuts, all of which are due to expire by the end of 2010. 

Republicans are hoping to appeal to voters in the upcoming election as 
the party that champions tax cuts while casting Democrats, who contend 
that those tax cuts primarily benefited the wealthy, as the party which 
would increase taxes. 

During his news conference, Bush predicted that the Republicans would 
maintain control of both the House and the Senate in part because of 
Democrats' stand on taxes. 

"There's a difference of opinion in the campaign about taxes," Bush 
said. "I would like to ... make the tax cuts permanent. And the 
Democrats will raise taxes." 

Bush said that while Democrats say they just want to raise taxes on rich 
people, "it's just a codeword. They're going to raise them on whoever 
they can raise them on." 

For their part, Democrats called the 2006 deficit improvement a 
temporary blip and predicted rising deficits for years to come unless 
policies are changed. 

"Only a president with such a historically bad economic record would be 
this excited about a $248 billion deficit," said Rep. Carolyn Maloney, D-
N.Y. "Under his watch ... record surpluses turned into record deficits 
as far as the eye can see." 

Both spending and tax revenues climbed to all-time highs in 2006. The 
sharp narrowing of the deficit reflected the fact that revenues climbed 
by 11.7 percent, outpacing the 7.3 percent increase in spending. 

The 2006 deficit was far lower than the $423 billion figure the 
administration had projected last February and also represented an 
improvement from a July revised estimate of $295.8 billion. 

Republicans said the big improvement showed that Bush's economic 
policies were working to stimulate growth and boost tax revenues. But 
Democrats said the narrowing of the deficit would be temporary as the 
pending retirement of 78 million baby boomers will send costs of the 
government's big benefit programs soaring. 

"The fact that some are trumpeting this year's deficit number as good 
news shows just how far we've fallen. Our budget picture is extremely 
serious by any measure," said Sen. Kent Conrad, the senior Democrat on 
the Budget Committee. 

The nonpartisan Congressional Budget Office projects that the deficit 
for the current budget year will rise to $286 billion. Over the next 
decade, the CBO forecasts that the deficit will total $1.76 trillion. 

Extending the Bush tax cuts, which are currently scheduled to expire at 
the end of 2010, would add another $2.2 trillion to the deficit through 
2016, the CBO estimates. 

The 2006 deficit was the smallest deficit since a $159 billion imbalance 
in 2002, a shortfall that came after four straight years of budget 
surpluses, the longest stretch that the government had finished with 
surpluses in seven decades. 

Since that time, the government has recorded three of the biggest 
deficits in history including an all-time record in dollar terms of $413 
billion in 2004. 

The reason for the improvement this year was a second consecutive big 
jump in revenues, propelled by strong economic strength. The 11.7 
percent increase in revenues was the second biggest percentage gain in 
history. 

The administration credits its tax cuts for the improving economy, 
contending they helped the nation withstand the 2001 recession, the 
terrorist attacks and a wave corporate accounting scandals. 

But Robert Greenstein, head of the liberal-leaning Center on Budget and 
Policy Priorities, said the big revenue increases in the past two years 
followed three consecutive years in which revenues fell, reflecting the 
impact of a recession and Bush's earlier tax cuts. 

"This temporary improvement has little to do with a tax-cut driven surge 
in revenues or the economy," he said. "What stands out is that both 
revenue growth and the economy have performed markedly worse in the 
current recovery than in average recoveries of modern times." 

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