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Saturday, March 5, 2005 - Page updated at 12:00 a.m.

Budget analysis challenges Bush's plan to cut deficits

The Associated Press

WASHINGTON — President Bush's budget would keep federal deficits at more than $200 billion annually over the next decade, Congress' top budget analyst said yesterday in a report that raises doubts about White House efforts to contain the shortfalls.

The analysis by the nonpartisan Congressional Budget Office (CBO) said Bush's plans for spending and taxes would yield deficits totaling $2.58 trillion through the decade ending in 2015. That is $1.6 trillion more than they would be if none of the president's fiscal plans become law, the budget office said, the chief factor being his plan to make already-enacted tax cuts permanent.

The CBO said it believes cumulative deficits over the next decade will be $125 billion more than it estimated two months ago. That is largely because it has added $70 billion to its projected 10-year costs of Medicare spending, about 1 percent more, including $54 billion more for the costs of prescription-drug coverage.

The new figures were released days before the House and Senate budget committees plan to write spending plans for the coming year. The panels' chairmen, Rep. Jim Nussle, R-Iowa, and Sen. Judd Gregg, R-N.H., have been hunting for GOP support for packages following Bush's proposals to restrain spending and cut deficits in half by 2009.

"The president has rightly called for fiscal discipline in every area, and I hope Congress has the courage to meet that challenge," Gregg said.

Democrats said Bush's plans were only making things worse.

"Today's analysis ... is the latest in a long line of evidence, all indicating that the administration's fiscal policies are moving us deeper and deeper into debt," said Rep. John Spratt of South Carolina, top Democrat on the House Budget Committee.

Yesterday's figures also highlight longer-term budget problems that lie ahead as the 78 million-strong baby-boom generation starts retiring this decade and drawing on costly programs such as Social Security and Medicare.

Bush's budget projected figures only for the next five years. He projected shortfalls through 2010 totaling almost $1.34 trillion, $57 billion less than the CBO estimate.

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The latest numbers also raised new doubts about Bush's goal of halving federal deficits in five years by projecting a 2009 deficit of $246 billion.

That would fulfill Bush's goal of halving the $521 billion shortfall he projected for last year — a projection that ended up being $109 billion too high. But it would not be close to cutting last year's actual $412 billion deficit in half.

"In the near term, we're doing exactly what we should be doing: bringing the deficit down steadily," said Noam Neusner, spokesman for the White House budget office. "As we do that, we will also turn our attention to the long-term deficit challenge."

Over the next decade, deficits would be no less than $229 billion in 2010, the CBO estimated. It also projected that Bush's fiscal plans would yield deficits of $394 billion this year and $332 billion in 2006.

That was less than the $427 billion and $390 billion shortfalls the White House has projected for those same years.

The CBO noted that Bush's budget omitted the costs of overhauling Social Security, which some analysts expect to exceed $1 trillion for the first decade.

Bush's budget also omits any new funds for U.S. military and reconstruction operations in Iraq and Afghanistan for 2006. The CBO said keeping next year's military operations at this year's levels probably would add about $40 billion to the 2006 shortfall, pushing it to perhaps $375 billion.

Copyright © 2005 The Seattle Times Company

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