Saturday, 16 February 2008

President Bush - 2000 billion deficit

The imbalance in the federal budget for 2008-2009 is multiplied by 2.5. The expenses for pensions and health care are sacrificed in favour of the defence.

Curiously optimistic about growth in America, the White House displayed a raw realism about the state of federal finances.

The team of George Bush, which will no longer be in power in less than a year predicts a rise of 2.7% of the activity in the United States in 2008 (3% in 2009). A forecast that contrasts with the caution of the International Monetary Fund (IMF), which recently reduced to 1.5% its forecast for the United States this year.

Yet it is a project seriously unbalanced budget that President Bush submitted yesterday for the next fiscal year (October 2008-September 2009). For the first time in the country's history, Bush will ask Congress to a total expenditure of more than 3000 billion dollars (+6% over the year). He had been the president to break down the barrier of 2000 billion in 2002.

At the end of his proposed budget, the federal deficit will surge to 410 billion dollars in 2008-2009, a figure equivalent to the record of 2004 (413 billion), representing 2.9% of gross domestic product (GDP). It is expected to stabilize at 407 billion next year (2.7% of GDP). By comparison, the "hole" of 2007 appears quite modest, at $ 162 billion (1.2% of national wealth). And the surpluses beginning of this century seem a distant memory.

Not surprisingly, the relaunch plan plank on which the Congress (see below) will weigh heavily in the accounts since it would cut revenues by $ 125 billion in 2008 and 20 billion in 2009. The defense is always expensive because the White House will ask for $ 70 billion for wars in Iraq and Afghanistan. For the 11th consecutive year, the Pentagon's budget will increase by 7.5% to 515 billion.

However, Bush believes that a return to a slight surplus is still possible in 2012. Provided, including control below 1% rise in discretionary spending, excluding security. To do this, the proposed budget size in 151 programs deemed ineffective, for a saving of over $ 18 billion. The Administration also slow the rise in insurance costs for public pensions and health in order to save 16 billion in 2009 and an estimated 619 billion over ten years.

Finally, the president reiterated his desire to make permanent the temporary tax cuts he had made to vote. Yesterday, elected Democrats but Republicans have criticized it "unrealistic". The defence spending are "totally underestimated, the savings are overstated because everyone knows that the announced cuts are not definitive," complained Republican Senator Judd Gregg, a member of the Budget Committee.