Tax Cuts Will Not Slash Deficits
by Guest Blogger, 3/7/2005
Last friday the CBO released their report saying the President's proposal to cut entitlement spending will actually save $11 billion less than the White House had initially projected. On top of this, according to today's CQ update, congressional budget writers are planning to include the estimated costs of Iraq and Afghanistan operations as well as a one year extension of Alternative Minimum Tax relief in the budget. This is significant because the White House ignored each of these items in their budget propsal.
Keeping these expenses -- as well as a deficit reduction goal -- in mind means the five-year tax cut figure in the budget resolution will likely have to decrease from what was originally envisioned by Bush and Congressional GOP leaders. Budget writers are realizing that these expenses, along with expensive tax cuts, will not achieve deficit reduction. Congressional aides are saying the tax cut amount may decrease from $100 billion to about $70 billion. There will be further updates later this week as the House and Senate budget committees mark-up the budget resolutions on wednesday and thursday.
