War, tax cuts and a third year of a flailing economy may push this year's budget deficit past $450 billion, according to congressional sources familiar with new White House budget forecasts. That would be 50 percent higher than the Bush administration forecast five months ago.
The deficit projection due out today is nearly $50 billion more than economists anticipated just last week, and it underscores the continuing deterioration of the government's fortunes since 2000, when the Treasury posted a $236 billion surplus. That represents a fiscal reversal exceeding $680 billion.
The rising tide of red ink has put Republicans on the defensive. Asked yesterday about growing war costs and budget deficits, White House spokesman Ari Fleischer cited the terrorist attacks on New York and the Pentagon in 2001, saying: "What was the cost of September 11th? What is the cost of a country that is attacked? What is the price that the American people would have to pay if something like that were ever to happen again?"
While cutting federal taxes, President Bush and Congress left billions of dollars of federal education, health care and homeland security obligations to states. Governors and legislators -- already struggling to fix record budget deficits, mostly without raising taxes -- cut spending deeply in almost every area, including local aid. With nowhere else to send the bill, local governments are cutting services and, in many cases, raising property taxes.
Faced with total deficits approaching $100 billion this budget season, governors and legislatures in more than half the states have pared the once-sacred state role of aiding local governments with cash for everything from policing to patching potholes, mowing ball fields, lighting streets, even zapping mosquitoes. Since poorer cities tend to rely more on state aid, the burden in many cases is landing on those least able to pay it.
Best New Blog finalist - 2003 Koufax Awards
A non-violent, counter-dominant, left-liberal, possibly charismatic, quasi anarcho-libertarian Quaker's take on politics, volleyball, and other esoterica.
Lo alecha ha-m'lacha ligmor, v'lo atah ben chorin l'hibateyl mimenah.