Even as US President George W. Bush sets a modest goal of reducing the federal deficit to about US$200 billion by 2009, many budget analysts and economists said they doubt that can be achieved.
Under fire from Democrats as well as conservative Republicans for allowing the deficit to reach more than US$400 billion this year, White House officials say Bush's upcoming budget will hold the growth in domestic discretionary programs to less than 1 percent.
That would amount to a budget cut for many agencies, after adjusting for inflation, and it would be sharp turnaround from the increased spending that Bush has either supported and condoned for the past three years.
But Bush's budget proposal for next year, to be unveiled Feb. 2, is likely to omit several huge costs that would de-rail his projections if they were included.
Administration officials said Bush's budget plan will not include the costs of supporting US troops in Iraq and Afghanistan beyond this year, because administration officials say those costs are unknowable.
But the cost of maintaining 100,000 soldiers in Iraq, which would be a decrease from the current troop levels, have been estimated at about US$50 billion a year. Even a significantly smaller force could cost tens of billions in 2005.
Bush is also unlikely to include the cost of fixing the so-called alternative minimum tax, a set of provisions that will lead to big tax increases for millions of families unless the law is changed.
Some lawmakers in both parties said they want to prevent that from happening, but analysts across the spectrum have said the cost will be more than US$100 billion over the next five years, and more than US$400 billion over the next ten years.
"The budget will cut the deficit in half in five years only on paper and not in the real world, and only by omitting roughly US$200 billion in costs for 2009 that the administration has itself indicated it favors and will request," said Robert Greenstein, director of the Center on Budget and Policy Priorities, a liberal research group in Washington.
Meanwhile, Bush will also face enormous difficulties on the spending front. Congressional Republicans are already pushing for a massive increase in spending on highways and mass transit over the next six years.
In a rare display of bipartisanship, House Republicans and Democrats are jointly pushing to spend US$375 billion over the next six years on highway and mass transit, while Senate leaders have proposed US$311 billion.
Fuel taxes are supposed to pay for those projects, but congressional analysts estimated that fuel taxes will at most supply about US$265 billion -- a shortfall that could total US$110 billion.
The good news for the administration is that the economic recovery is now beginning to generate additional tax revenue, after three years of declining revenues.
But forecasters in the administration and in Congress had already been assuming an increase in tax revenues, so the added revenue may do little to offset the cost of extra spending and additional tax cuts that are not in the administration's official proposal.
On Friday, the Pentagon announced that it will seek 7 percent more money next year, or US$401.7 billion. But that increase does not include money for Iraq or Afghanistan, which the administration officials say they will seek in a supplemental request if they need to do so next year.
RSS