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Roundup: US Democratic, Republican Parties Battle Over Surplus
US Congressional Budget Office (CBO) projected Tuesday that this year's federal budget surplus has plunged to 153 billion dollars due to the sluggish economy and President Bush's 10-year, 1.35 trillion dollars tax cut plan, forcing the federal government to use 9 billion dollars of Social Security reserves to make ends meet.
The new estimate for the federal surplus is 44 percent lower from the 275 billion dollars the CBO predicted just three years ago. The CBO said that if current spending habits aren't changed, the Social Security surplus would be dipped into again in 2003, for 18 billion dollars, and in 2004, for 3 billion dollars.
For the 10-year period from 2002 to 2011, the CBO calculated the nation will have a total surplus of 3.4 trillion dollars, three quarters of which would be made up of excess monies in the Social Security trust fund. The number is 2.2 trillion dollars less than was projected just last May.
The CBO's new numbers offer a dimmer view of the federal budget than that provided by the White House Office of Management and Budget (OMB) last week. The Bush administration last week forecast a surplus of 158 billion dollars this year and claimed that Social Security would remain untouched this year.
Bush insisted last week that the Social Security fund should not be tapped unless the nation was at war or in a recession.
Democrats have been quick to use the new budget numbers to attack the Bush administration and the Republican Party, saying that Bush's tax cut is too costly, especially in tandem with the administration's proposals to increase spending for defense, education and other programs.
Senator Kent Conrad, a Democrat from North Dakota and chairman of the Senate Budget Committee, cautioned that the CBO projections do not include Bush's proposed spending over the next decade on items such as defense and education.
"What we see is really far more serious," Conrad said Tuesday. "They have an obligation to tell us -- for example, when the president asks for 18 billion dollars more for defense next year -- how is he going to pay for it?"
But administration officials and congressional Republicans have defended their priorities and last week's OMB numbers, saying President's Bush's plan would continue to protect the Social Security surplus.
Republican lawmakers have said over the past few weeks that the tax cut would help to stimulate the economy, and the biggest threat to the surplus is too much spending by Congress.
"The budget is tight, and that is exactly where we want it to be and where we need it to be," said Representative Jim Nussle, a Republican from Iowa and chairman of the House Budget Committee.
The debate over the dwindling surplus and the budget is expected to intensify when Congress returns to work from recess next week. On top of Congress' agenda in the coming weeks will be completion of the 13 yearly appropriations bills, which will determine how the nation's 2 trillion dollars, fiscal 2002 budget will be spent.
The fight on Capitol Hill will center on items such as Bush's 18.4 billion dollars defense spending increase request and up to 17 billion dollars extra to overhaul education.
"I think it's going to be a very difficult fall period for both the Congress and the Administration, Kent Conrad said.
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