WP: Analysts Say Outlook For Bush Plan Bleak [View All]

Too Much Deficit, Not Enough Revenue

President Bush signaled yesterday that he would add personal investment accounts to the Social Security system, simplify the tax code without raising taxes and cut the budget deficit in half, all before he leaves office in 2009.

Ambitious as those promises are, they may be mathematically impossible, budget and policy analysts say.

"It doesn't seem like we're going to see any tightness in U.S. budget policy anytime soon," said Rebecca Patterson, senior currency strategist at Wall Street giant JPMorgan Chase.

Bush pledged early this year to halve the deficit in five years, a promise he renewed yesterday. "I would suggest look at our budget that we've submitted to Congress, which does, in fact, get the deficit down, cut in half in five years," Bush said.

But in an independent analysis of that budget, the nonpartisan Congressional Budget Office concluded it would not fulfill that promise. The deficit in fiscal 2004, which ended Sept. 30, was $413 billion. Under Bush's plan for spending and taxes, the deficit would be $258 billion in 2009. If anything, that may understate the size of the deficit in coming years because it does not include any additional costs for the wars in Iraq and Afghanistan. The Pentagon is expected to seek an additional $70 billion early next year.

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http://www.washingtonpost.com/wp-dyn/articles/A26458-2004Nov4.html