US President George W. Bush will leave out of his budget widely anticipated Iraq-related costs and an expensive tax system overhaul to meet his election-year goal of cutting the federal deficit, congressional aides and budget analysts said on Friday. \nBush is banking on strong economic growth and spending restraint from Congress -- neither of which is a certainty -- to reduce the deficit from this year's projected record high of US$521 billion to less than US$260 billion by fiscal 2009. \nCongressional officials and analysts say Bush will also rely on budget gimmicks -- from stretching the definition of homeland security to sidestep spending limits to proposing only a temporary extension of provisions that prevent the alternative minimum tax from raising taxes for potentially millions of middle-class workers. \nEven though the Pentagon is all but certain to need US$40 billion or more to fund operations in Iraq in the next fiscal year, the White House has told lawmakers that Bush's US$401.7 billion military budget for next year will leave that out, congressional aides and analysts said. \nDoing so makes it easier for the administration to project a reduction in the deficit next year. But the decision is already drawing fire from Bush's Democratic challengers, as well as fiscal conservatives, who say the administration could provide at least a partial cost estimate. \nAn administration official defended the decision to put off any Iraq-related requests until Congress convenes in 2005 after the election. \n"It is too early to adequately predict what the needs will be," he said. \nCongressional aides said the White House was taking a similar approach toward taxes. \nBut Bush has little choice, if he hopes to cut the deficit in half on schedule. According to congressional estimates, fixing the alternative minimum tax and related changes could cost US$658 billion over 10 years, and push the deficit well above US$260 billion in 2009. \nBush can ill-afford to let the current alternative minimum tax relief expire at the end of this year since doing so would raise taxes for millions of mid-level earners, a critical voting block in the November presidential election. \nRepublicans and Democrats criticized the practice as deceptive. \n"It's irresponsible," said one senior Senate aide of Bush's plans for the alternative minimum tax, which requires some middle and upper-income taxpayers to calculate their taxes in two ways and pay the higher bill. \nCongressional aides say the White House has settled on a stop-gap measure to minimize the budget impact. \nInstead of proposing a budget-busting long-term fix, the administration is expected to propose one to two-year extensions of the alternative minimum tax provisions, delaying the issue and the costs. \nUnlike the regular income tax, the alternative minimum tax is not indexed for inflation. This means that the number of people affected will skyrocket -- and reach further into the middle class. By 2010, the alternative minimum tax could affect one-third of all tax returns.
RECORD BUDGET: TSMC does plan to raise its proposed capital expenditure a lot, and could benefit if Intel outsources more of its production to foundries, analysts said Intel Corp’s earnings conference call on Thursday is expected to clarify the US semiconductor giant’s outsourcing production plans, which would be crucial regarding Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) performance, analysts said. “TSMC stands to benefit if Intel outsources more of its fabrication to foundries,” SinoPac Securities Investment Service Corp (永豐投顧) analysts said in a note on Friday. Yuanta Securities Investment Consulting Co (元大投顧) was more cautious, saying that Intel’s contribution initially would be limited, but its outsourcing plans would still highlight TSMC’s leadership in technology, it added. “Intel will continue to manufacture server or high-end central processing units [CPUs], which have higher
MediaTek Inc (聯發科) yesterday announced it would give incentive bonuses totaling NT$1.7 billion (US$59.7 million) to its employees and those at the firm’s major subsidiaries, after the smartphone chip supplier’s revenue hit US$10 billion last year. This is the biggest incentive bonus the Hsinchu-based handset chip designer has ever distributed in its 23-year history. About 17,000 full-time employees of MediaTek and five of its subsidiaries, including Richtek Technology Corp (立錡科技) and Airoha Technology Corp (絡達科技), would receive a “red envelope” of NT$100,000 each, the company said. “Surpassing US$10 billion is just the beginning. We will continue to [grow] on this basis,” MediaTek
TO SPUR REVENUE: The contract chipmaker expects its profit to grow 15 percent this year, outpacing the foundry industry’s projected advance of about 10 percent Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday raised its projected capital spending for this year by 62 percent, a new high, in an attempt to satisfy customer demand for advanced technologies in the production of central processing units, high-performance-computing (HPC) devices and 5G applications. After investing US$17.24 billion last year, TSMC this year plans to spend US$25 billion to US$28 billion on manufacturing equipment and new facilities, including a fab in the US. About 80 percent of the budget would be allocated for developing advanced technologies including 3, 5 and 7-nanometer technologies, the company said. The larger-than-expected capital spending prompted speculation
Norway’s oil and gas reserves have made it one of the world’s wealthiest countries, but its dreams for deep-sea discovery now center on something different. This time, Oslo is looking for a leading role in mining copper, zinc and other metals found on the seabed and in hot demand in green technologies. The country could license companies for deep-sea mining as early as 2023, the Norwegian Ministry of Petroleum and Energy said, potentially placing it among the first countries to harvest seabed metals for electric vehicle batteries, wind turbines and solar farms. However, that could also place it on the front line of
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