Congressman Adam Smith Reacts to New Congressional Budget Office Economic Outlook for Fiscal Years 2006-2015
January 25, 2005
The following is a statement by Rep. Adam Smith (D-WA) on the new Congressional Budget Office (CBO) Economic Outlook for Fiscal Years 2006-2015:
“The economic outlook affirms what we already know: Washington D.C. has thrown fiscal responsibility out the window. In the last four years, the Bush Administration and Congress have taken a ten-year surplus of $5.6 trillion and created a deficit of at least $2.6 trillion. The new CBO budget forecast projects a deficit of $855 billion over the period of 2006-2015, although this projection underestimates the deficit because of the assumptions that the CBO is required to make by law. CBO must assume in its baseline that all current tax cuts scheduled to expire in the future do so, while also assuming spending on annual appropriations only grows with the rate of inflation. The estimated $ 855 billion also does not account for the estimated deficit for fiscal year 2005 which is expected to be at least $ 368 billion.
There are three fundamental problems with CBO’s new economic forecast:
- The CBO is assuming that when the Bush tax cuts expire, they will not be renewed. Every indication that I have seen from this Administration and the Republican-controlled Congress, is that they plan to make the tax cuts permanent and possibly install additional cuts.
- The CBO is also assuming that no additional costs for the wars in Iraq and Afghanistan in future years because there is no new funding in the budget for 2005 to be carried forward. And yet, an $80 billion supplemental spending bill is being prepared to be sent to Congress in the next few weeks.
- The CBO also disregards what the President has said about proposed spending such as reforming Social Security, including privatization, even though his plan would add approximately $2 trillion to the deficit over the next ten years.
Congress must give the American people a truthful estimate of our fiscal state and this report does not give them those answers. The three factors I have outlined must be included in any projection as they are all likely, if not definite, spending the federal government is expected to act on this year. The CBO estimates along with projections by the Bush Administration are not accurate reflections of our economy but instead they are filled with accounting gimmicks to make the future appear rosier than it will be. The time to come up with a real plan to pay down the debt and get our budget back on track is now. Otherwise, the costs will be enormous not only to our children and grandchildren, but they will also wreck havoc on our economy and plunge this country into a worse financial crisis for decades to come.”