WASHINGTON – Congress' top fiscal analyst is projecting modest surpluses of $5 billion this year and $6 billion in 2003 as the starting point for this year's budget fight, a small but politically significant turnabout from the deficits envisioned in January.
The nonpartisan Congressional Budget Office has also concluded that if the new tax and spending proposals in President Bush's budget for next year are enacted, it would produce a deficit of $121 billion in 2003. Bush himself has estimated that would mean a deficit of $80 billion.
Bush's budget would produce a $51 billion deficit in 2004, but then generate a stream of annual surpluses totaling $681 billion in the decade beginning in 2003, the budget office said. That is $322 billion less than the 10-year surplus the president projected.
The numbers were contained in testimony that Congressional Budget Office Director Dan Crippen planned to deliver Wednesday to the Senate Budget Committee.
In January, CBO foresaw deficits of $21 billion this year and $14 billion in fiscal 2003, which starts Oct. 1, before any tax cuts or spending increases are enacted.
Compared to the overall $2.1 trillion federal budget and the $10 trillion U.S. economy, a numerical turnaround of that magnitude is tiny.
Nonetheless, the figures are used by lawmakers as a starting point as they begin crafting the year's spending and tax legislation.
And the new surplus projections are politically significant because they will likely lend momentum to conservatives and other Republicans who want the GOP to push a budget through the House this year that claims to be in balance.
The improvement from just two months ago largely reflects new economic data that suggest the recession is fading or perhaps even over. Stronger economic growth means the government can count on additional revenue and less spending in some programs.
CBO's projections of small surpluses for the next two years assume that no new spending increases or tax cuts are enacted. That is highly unlikely, since added spending for defense and homeland security is a virtual certainty this year and there is bipartisan support to increase spending for farmers, schools and other areas.