Budget Office Raises Surplus Projections
January 26, 2000
In December 1999, the Congressional Budget Office projected federal spending would consume this year's entire nonpayroll tax surplus -- then drain Social Security reserves of $17 billion.
- Now the CBO says the federal government will have a $23 billion non-Social Security surplus -- plus $153 billion in payroll tax revenues over and above what Social Security will pay out in benefits -- this fiscal year, which began in October.
- In fiscal year 2001, the CBO estimates a $69 billion nonpayroll tax surplus -- plus $166 billion extra in Social Security taxes.
- If spending caps that Congress and President Clinton agreed to in 1997 are exceeded, then then CBO estimates the 2001 surplus will be just $11 billion.
Excess payroll tax revenues are put in an accounting category called "trust funds," and are supposed to be reserved to pay future Social Security benefits. Of course, the excess funds are spent anyway.
Source: Paul Leavitt, "Budget Office Raises Surplus Projections," USA Today, January 26, 2000.
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