10-year Federal Surplus Estimate Trimmed $4 Trillion
January 24, 2002
The Congressional Budget Office has reduced its 10-year estimate of federal budget surpluses from $5.6 trillion down to $1.6 trillion, said CBO Director Dan Crippen in testimony to the House and Senate Budget Committees yesterday.
- Over the 10 year period from Fiscal Year 2002 (which began October 1, 2001) through FY 2012, the CBO says the Bush tax cut enacted last year will account for $1.28 trillion in reduced surplus.
- Projected spending increases will reduce the surplus $538 billion, extra interest payments account for $562 billion, and the recession accounts for $929 billion.
- A further $660 billion in surplus reduction came from CBO changes in projections of federal tax collections.
- Crippen also said the federal budget would have a $21 billion deficit in FY 2002 and a $14 billion deficit in FY 2003, based on current spending and revenue patterns.
Senate Budget Committee member Sen. Charles Grassley (R-Iowa) pointed out that the tax cut is responsible for less than 15 percent of the reduction in this year's surplus and less than 40 percent of the reduction in surpluses over the next 10 years. He said the slowdown in the economy and the additional spending enacted last year are responsible for most of the deterioration in the budget outlook.
Source: "CBO Trims $4 Trillion From 10-Year Surplus Estimates, Conrad Blames Bush For Federal Budget Deficits," White House Bulletin, January 23, 2002; Dan L. Crippen (director, CBO), "Testimony before the House Budget Committee on the Budget and Economic Outlook: Fiscal Years 2003-2012 (Identical to Senate Budget Committee testimony), January 23, 2002.
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