Word: cbo
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Dates: during 2000-2009
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...Macroeconomic issues got some attention from Republicans, for whom Greenspan's very reassuring tax comments before the Senate Budget Committee last month was just fine, thank you very much. Democrats ignored the larger economy almost completely, mentioning it only in the service of the White House's and CBO's surplus projections. As in, the projections are always wrong...
...CBO's projection expects government spending to stay level, which it won't, and for certain existing tax credits to be allowed to expire, which they won't. (And a real, multi-year recession would of course make those surpluses disappear very fast.) But an extra $1.4 trillion is a heck of a lot of breathing room, and Democrats will be hard-pressed to argue that even Bush's now-enlarged proposal (it's $1.6 trillion from 2002-2011 instead of the old $1.3 trillion from 2002-2010) will break the fiscal bank...
...will be fiscal discipline. Greenspan's own view of the surplus's long-term viability will be a major factor, and you can bet he's skeptical about not only the wisdom of any 10-year economic forecasts but politicians' ability to keep spending in check. But here the CBO's new numbers should come into play again - that surplus may be part fantasy, but at least it's getting larger...
...Bush's people will remind Greenspan that giving back $1.6 trillion in tax cuts sure beats $1.6 trillion in new spending, and that if the budget gets tight a few years hence, a tax cut is a lot easier to ditch than an entitlement. And with the CBO's accountants drowning in black ink, taking the money off the table is a hedge against the bloated budgets of the future. Heck, it might even perk up the markets a little bit in the meantime...
Half the surplus will be needed for Social Security, and both candidates promise that money is off limits. And the projected $2.2 trillion that remains may turn out to be far less. For one thing, the CBO estimates do not account for the fact that many popular tax breaks now scheduled to expire will almost certainly be renewed. The projections also assume that discretionary spending, such as the defense and education budgets, will grow no faster than inflation. Judging from recent history, Congress is unlikely to show that kind of restraint. "At best, we have a small surplus, nothing like...