By Jonathan Weisman
Washington Post Staff Writer
Tuesday, September 7, 2004; 11:13 AM
A recovery in corporate taxation has modestly improved the federal government's short-run deficit, but the long-term deficit has only grown worse during the past six months, thanks largely to an anticipated surge in government spending, the non-partisan Congressional Budget Office said today.
The deficit for the current fiscal year, which ends Sept. 30, will reach $422 billion, a record in dollar terms but a $56 billion improvement from CBO's forecast in January. The government, however, is now expected to accumulate debt of nearly $2.3 trillion during the next decade, the CBO said. That total is $281 billion higher than the last CBO forecast. The budget office anticipates that the total federal debt held by the public will balloon from $4.3 billion this year to nearly $6.8 billion in 2014.
That total may prove to be optimistic. It assumes that all of President Bush's tax cuts will expire by 2011, although Bush and congressional Republicans have vowed to extend them permanently. If they succeed, the extensions would tack at least $1.5 trillion to the debt through 2014, the CBO report said.
The alternative minimum tax, which was created to ensure the wealthy pay income taxes but which will increasingly ensnare the middle class, will present another strain on the deficit. Reforming the tax -- which both political parties say is a priority -- would cost the government another $425 billion over the next 10 years, CBO said.
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When comparing it to the % of the GDP it is a pittance as per the deficit that people like FDR built up. Factor in Reagan's deficit's spelled doom for communism and as usual, the libs are short-sighted.