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July 11, 2006
Tax Revenues Cutting Deficit Faster Than Planned
By JEREMY W. PETERS
Surprisingly high tax revenues will help the federal government reduce its budget deficit faster than planned, President Bush said today as his administration delivered its annual mid-year review to Congress.
According to White House figures, the government is likely to finish its fiscal year on Sept. 30 with a deficit of $296 billion, about $127 billion less than initially forecast.
But even as he cheered the new figures, Mr. Bush warned Congress against overspending, particularly on programs like Medicaid and Medicare.
“The spending for these programs is growing faster than inflation, faster than the economy and faster than our ability to pay for them,” he said in remarks delivered from the East Room of the White House. “We need to do something about it.”
Mr. Bush called the latest budget figures evidence that his administration’s program of tax cuts was behind the country’s prosperity. “Together, these tax cuts left nearly $1.1 trillion in the hands of American workers and families and small business owners,” he said. “They used this money to help fuel an economic resurgence.”
But [gloom and doom] Democrats and [unnamed] independent budget analysts say that government revenues are now only barely above their level of six years ago, before the economy went into a brief recession. They say that this year’s tax receipts appear to be a surge only because the last five years were so weak.
The White House said today that tax receipts this year will total $2.4 trillion, $119 billion higher than expected, mainly because of a jump in corporate tax payments. Those are up 19 percent for the fiscal year, compared with an 11 percent increase in overall tax collections.
The treasury also benefited from rapid economic expansion during the first quarter, which reached an annual rate of 5.6 percent. Many economists expect the growth rate to slow considerably for the rest of 2006, and settle closer to a more sustainable 3 percent.
Mr. Bush also used his speech to press the Senate to give him the authority to veto parts of spending bills line by line, rather than have to sign or veto the whole bill. Last month, the House passed a bill that would give the president the power to strike individual sections of legislation, but the Senate is viewed as much less likely to go along with the idea.
“We cannot depend on just a growing economy to keep cutting the deficit,” Mr. Bush said. “That’s just one part of the equation. We’ve got to cut out wasteful spending.”
Tax Revenues Cutting Deficit Faster Than Planned
By JEREMY W. PETERS
Surprisingly high tax revenues will help the federal government reduce its budget deficit faster than planned, President Bush said today as his administration delivered its annual mid-year review to Congress.
According to White House figures, the government is likely to finish its fiscal year on Sept. 30 with a deficit of $296 billion, about $127 billion less than initially forecast.
But even as he cheered the new figures, Mr. Bush warned Congress against overspending, particularly on programs like Medicaid and Medicare.
“The spending for these programs is growing faster than inflation, faster than the economy and faster than our ability to pay for them,” he said in remarks delivered from the East Room of the White House. “We need to do something about it.”
Mr. Bush called the latest budget figures evidence that his administration’s program of tax cuts was behind the country’s prosperity. “Together, these tax cuts left nearly $1.1 trillion in the hands of American workers and families and small business owners,” he said. “They used this money to help fuel an economic resurgence.”
But [gloom and doom] Democrats and [unnamed] independent budget analysts say that government revenues are now only barely above their level of six years ago, before the economy went into a brief recession. They say that this year’s tax receipts appear to be a surge only because the last five years were so weak.
The White House said today that tax receipts this year will total $2.4 trillion, $119 billion higher than expected, mainly because of a jump in corporate tax payments. Those are up 19 percent for the fiscal year, compared with an 11 percent increase in overall tax collections.
The treasury also benefited from rapid economic expansion during the first quarter, which reached an annual rate of 5.6 percent. Many economists expect the growth rate to slow considerably for the rest of 2006, and settle closer to a more sustainable 3 percent.
Mr. Bush also used his speech to press the Senate to give him the authority to veto parts of spending bills line by line, rather than have to sign or veto the whole bill. Last month, the House passed a bill that would give the president the power to strike individual sections of legislation, but the Senate is viewed as much less likely to go along with the idea.
“We cannot depend on just a growing economy to keep cutting the deficit,” Mr. Bush said. “That’s just one part of the equation. We’ve got to cut out wasteful spending.”