SOME BIG BUDGET IFs

September 16, 2008
Michael Sheehan

Physician's Money Digest, January15 2003, Volume 10, Issue 1

According to the CongressionalBudget Office (CBO), getting thegovernment back in the black may beno easy task. Although the CBO hasissued optimistic forecasts that showthe federal budget deficits turninginto surpluses in 3 years, with a $1trillion surplus in 10 years, these projectionsare based on letting the Bushtax cuts phase out according to thelaw's original schedule, with no additionalcuts, and keeping increases indiscretionary government spendingin line with the rate of inflation (it'snow increasing at 8% per year). If thetax cuts are made permanent and ifspending increases at an 8.5% rate,the CBO says the government will befacing a $2.9 trillion shortfall in 10years, instead of the $1 trillion surplusit originally predicted.