It's been a busy news day for tax and budget news and the last item is the biggest. The Congressional Budget Office has released its estimates for the cost of President Bush's FY06 Budget. The CBO regularly estimates the cost of legislation and policies for the Congress and this report will greatly impact the way the Congressional Budget committees in the House and Senate write their FY06 budget resolutions, slated to be marked up by the committees next week. In their report, CBO estimates that President Bush's budget would keep deficits about $200 billion each year for the next decade and add over $1.6 trillion to the national debt that would otherwise occur if the policies were not enacted in that time period. CBO predicts a FY05 deficit of $394 billion and FY06 deficit of $332 billion. CBO also lowers the savings that would result from some of the president's cuts to mandatory spending. Overall, CBO estimates changes to mandatory spending would save $26 billion in FY06, not the $38.7 billion cited by the president. They also lower the estimate for savings in Medicaid and the S-CHIP program from $45 billion to $27 billion - almost half that amount. The most promienent conclusion in the report is surely that Bush will come up short of his promise to cut the deficit in half by 2009. It projects a deficit in 2009 of $246 billion, fully $40 billion short of Bush's goal. Further, neither Bush's budget nor the CBO report include many expensive future policies likely to be enacted, such as costs for overhauling Social Security ($1 to $2 trillion over 10 years), fixing the Alternative Minimum Tax ($754 billion over 10 years), or supplemental military costs for the wars in Iraq and Afhganistan (currently $82 billion for 2005). Despite this grim forecast, the administration and Republican leaders in Congress are steadfast in their support of making CBOs projections a reality by extending tax cuts to the wealthy without offsets to pay for them.