Lawmaker wants more 'realistic' accounting to balance budget

Sen. George Voinovich, R-Ohio, said Wednesday that new Congressional Budget Office projections warn of an "oncoming budget crisis" and urged Congress to pass a "truth in accounting" budget proposal sponsored by him and Sen. Russell Feingold, D-Wis.

The proposal would force lawmakers to make the "tough decisions" to bring the government back toward balance, Voinovich said. Under the current CBO baseline, which assumes spending grows at inflation and the Bush tax cut is not renewed, the government is headed for a unified surplus in fiscal 2006, although an on-budget surplus-which excludes using excess Social Security receipts to pay for discretionary government spending-would not materialize until fiscal 2011.

Claiming that baseline does not accurately project the fiscal situation of the federal government, Voinovich asked CBO to recalculate using more "realistic" assumptions about spending and tax policy. If the tax cut is extended and spending outlays remain at the same percentage level of GDP [Gross Domestic Product] over the next decade, CBO said the government would run a unified deficit of $1.5 trillion and an on-budget deficit of $4 trillion. More striking, if spending were to grow at an annual rate of 8.5 percent, as has been the case in recent years, the unified deficit would total $2.87 trillion and the on-budget deficit $5.4 trillion.

Robert Bixby, head of the bipartisan Concord Coalition who appeared at the news conference with Voinovich, called the figures "pretty sobering," and warned of "fiscal chaos." He said calls for increased defense and homeland security spending, a prescription drug benefit, an alternative minimum tax fix and new tax cuts would worsen the outlook even more. Bixby also called the impending baby boom generation's retirement the "Sword of Damocles" hanging over all budget decisions.

Voinovich said his legislation, which will be reintroduced in the next Congress, would help lawmakers understand the budget by forcing CBO to score interest expense and long-term costs associated with legislation, as well as requiring the president to submit an annual list of budget liabilities.

The bill would also extend current budget enforcement mechanisms, institute biennial budgeting and require the Budget committees to set spending allocations for Appropriations subcommittees. Asked whether he would support a permanent extension of the Bush tax cut given the worsening federal budget situation, Voinovich said he would probably vote for it, although he said he had some reservations about the estate tax and might seek to address that in a different way.

He also said he would only support new tax cuts if he believed they would have an immediate, stimulating effect on the economy. "If not, I wouldn't support them," said Voinovich, saying a stimulus bill should not be an open door for long-term tax fixes.

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