Today, President Bush signed into law the Homeland Security appropriations bill, which was passed last monday by the Senate in a special Columbus Day session. The $33 billion bill is only the second to be passed by Congress and signed by the President, along with the Defense appropriations measure.

Also today, Public Citizen, a Washington, D.C. based non-profit organization, released a major report asserting that this administration has failed to protect infrastructures critical to National Homeland Security. The report, Homeland Unsecured, asserts that not enough has been done to ensure the protection of chemical and nuclear plants, hazardous material transport, seaports, and drinking water systems. In the report, Public Citizen argues that the White House has hindered steps to strengthen security at chemical and nuclear plants, has failed to make the transportation of hazardous materials more secure, and hasn't taken the necessary action to ensure the safety of drinking water or secure the nation's ports.

A copy of Public Citizen's report can be found here.

Last month the Congressional Budget Office (CBO) projected a $422 billion deficit for fiscal year 2004, and a $348 billion dollar deficit for FY2005. To see an OMB Watch analysis of this baseline projection read "Beyond the Baseline: 10 Year Deficits Likely to Reach $5.5 Trillion." As it turns out, the preliminary estimate released today is approximately $7 billion less than the CBO stated last month, according to their most recent Monthly Budget Review. Now they are reporting that the federal government incurred a deficit of $415 billion in FY2004.

This preliminary deficit figure is about $41 billion more than the FY2003 deficit, and 3.6 percent of the national Gross Domestic Product (GDP). Although it was reported that annual receipts rose by approximately 5.5 percent, they remain about 7 percent below their peak level in FY2000. And, according to the monthly review, individual income tax receipts remain approximately 25 percent below their peak in 2000. The drop in those receipts can be attributed to the recession, the decline in the stock market, and the Bush administration's tax cuts, the most recent of which were passed last week in a $146 billion package.

Interestingly, over half of the increase in receipts for FY2004 came from corporate income taxes, which ended up totalling approximately $57 billion more than they did in 2003. Federal income taxes paid by corporations can effectively serve to offset government outlays, and can bring down the budget deficit. Despite this fact, a study released in late September by the Institute on Taxation and Economic Policy (ITEP) and Citizens for Tax Justice (CTJ) found that between the years of 2001 - 2003, 275 of the nation's largest companies did not pay their fair share of income taxes; in addition many received excessive tax rebate checks.

A copy of the ITEP/CTJ report can be found here. Perhaps if corporations paid their fair share of taxes, and if federal legislation stopped handing out so many corporate tax breaks, we would see a decline in the deficit, which has been rising consistently since 2000.

Note: The figure $415 billion is the preliminary estimate for the national deficit; the Department of the Treasury will release the actual figure later this month.

Yesterday, the Joint Committee on Taxation released an updated score on the "chairman's mark" of the FSC/ETI bill. (See http://www.house.gov/jct/x-68-04r.pdf.)

Overall, the score raises $238 million in revenue, although there are several gimmicks which are used to keep the costs down (see http://www.cbpp.org/10-4-04tax.htm.)

• The repeal of the exclusion of ETI will cost $57.7 billion.
• Under title VIII, there are revenue provisions to close loopholes and raise some fees, which raise a total of $81.7 billion

The revenue enhancements from the repeal of the ETI regime and the loophole closings thus total $139.4 billion. (Note that this total would come close to paying for the $146 billion price tag of the "middle class" tax cut.)

Rather than using this money to finance cuts in other areas of the tax code or pay off the debt, the bill gives over $139 billion in additional tax cuts primarily to businesses.