Congress' decision to provide a Medicare drug benefit has dramatically worsened the long-term outlook for the federal deficit, the Congressional Budget Office said Monday.
This year's deficit will hit a record $477-billion, $3-billion less than projected just five months ago.
But the surprise in the report was that the CBO now projects total deficits to reach nearly $1.9-trillion between 2005 and 2014, up from an August prediction of $1.4-trillion in total deficits for the next decade.
The CBO is required to base its projections on existing law and to assume that spending will grow no faster than inflation. Thus, they do not include a number of expensive items that Congress is expected to address this year.
One of these is President Bush's plan to make expiring tax cuts permanent. If the Republican-controlled Congress were to approve his plan, it could send the deficit significantly higher.
Many people think Congress will also provide a multibillion-dollar "fix" for the alternative minimum tax, which is beginning to affect middle-income families.
On the other hand, the CBO was forced to assume that the $87-billion in supplemental spending that Congress approved last year for the war in Iraq will continue at that level over the next decade. The administration is moving to reduce U.S. involvement in Iraq.
Democrats were quick to pounce on the CBO's projections, saying they reflect Bush's failure to set responsible budget priorities.
North Dakota's Sen. Kent Conrad, the top Democrat on the Senate Budget Committee, said Bush is the "most fiscally irresponsible president in our nation's history."
"The president wants to go to Mars, and he's got deficits going to the moon," Conrad said.
House Democratic Whip Steny Hoyer of Maryland said that when Bush took office in 2001, "he inherited a projected 10-year budget surplus of $5.6-trillion." But the surplus has disappeared because Bush has reverted to the same "strange brew of economic quackery" that President Ronald Reagan supported in the 1980s, he said.
White House spokesman Scott McClellan said the administration is addressing the deficit problem. "The president has a plan to cut the deficit in half over the next five years, and that's what we intend to do," he said.
When the administration unveils its fiscal 2005 budget next week, it is expected to hold the growth of spending to less than 4 percent, not counting entitlements such as Social Security and Medicare. Spending outside of defense and homeland security would be held to less than 1 percent.
Though Democrats have focused most of their criticism on the Bush-supported tax cuts, the CBO primarily blamed increased spending for the jump in deficits.
On the Web
Congressional Budget Office: www.cbo.gov