CBO says budget won't quite balance by fiscal 2012
Office’s figure is about $70 billion lower than the White House's estimate of a $61 billion surplus at the end of the five-year budget window.
The Congressional Budget Office on Friday estimated that President Bush's $2.9 trillion fiscal 2008 budget would not balance within five years as advertised -- but Republicans claimed its estimated fiscal 2012 deficit of $9 billion amounts to being "virtually" balanced.
"I see this as a piece of good news because CBO is showing the president's policies virtually get us to a balanced budget," said House Budget ranking member Paul Ryan, R-Wis. "Clearly, we can get to a balanced budget without raising taxes."
CBO's figure is about $70 billion lower than the White House's estimate of a $61 billion surplus at the end of the five-year budget window, although CBO said if the president's policies are enacted in their entirety and no other changes in law are made, the chance of a slight deficit in fiscal 2012 is "about equal" to the likelihood of surplus.
Total deficits over five years would be about $439 billion more under CBO's re-estimate than in Office of Management and Budget projections, and $1.4 trillion over the next decade. The president's budget does not factor in policies beyond five years; when the impact of Bush's proposals are extended beyond five years, deficits continue to grow after the first five years, though very small, for a total of $830 billion over 10 years.
Over the course of five years, CBO estimated that about $256 billion less in revenues would come under Bush's proposals than OMB projects. The difference in fiscal 2012 would be about $119 billion. However, CBO said Bush's tax proposals would cost less than advertised, in large part because of new estimates of the impact of his plan to treat health insurance benefits as taxable income while adding a standard tax deduction for individuals who buy health insurance.
OMB said when the two proposals were combined the overall impact would lower the deficit by $5 billion, but CBO dramatically revised that estimate, saying the proposals would increase revenues by $557 billion over 10 years. The total impact of Bush's tax proposals would add an estimated $1.4 trillion to the deficit over the next decade, down about $417 billion from OMB's estimate.