NCPA - National Center for Policy Analysis


May 19, 1997

The Republican Congress was elected in 1995 to downsize government. So why is it heralding a proposed budget deal that will increase --not reduce -- federal spending by $270 billion over the budget's five-year period? According to budget analysts:

  • 1998 spending is projected to go up by $69 billion, $7 billion more than last year.
  • Next year, the deficit is projected to go up $21 billion and will stay above current level until the next millennium.
  • According to the Congressional Budget Office (CBO) baseline, in 1998 the proposal will reduce the deficit by only $1 billion, lower spending by $7.3 billion, and yield tax cuts of only $6.5 billion.

The celebrated tax cuts are anemic at best, according to economists:

  • Analysis show the budget deal will return 1 penny on every dollar collected.
  • The 500-per-child tax credit is more likely to be $200 and is phased in over time.
  • The proposed cut in capital gains is half (18 percent) of the cut originally proposed in negotiations and is expected to actually be as high as 21 percent.

Analysis shows the budget deal is disappointing and should be rejected. During the first two years of the 105th Republican Congress, spending will increase on average by 3.9 percent per year, higher than the average 3.7 percent increase Democratic controlled Congresses have given us, figures show.

Source: James Miller (Citizens for a Sound Economy), "Why the Deal Deserves a No," Washington Times, May 19, 1997.


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