Magazine article Black Enterprise

The Federal Budget Battle: Buy Now-Pay Later Proposals Too Costly for African Americans, Says Economist. (the Economy & You)

Magazine article Black Enterprise

The Federal Budget Battle: Buy Now-Pay Later Proposals Too Costly for African Americans, Says Economist. (the Economy & You)

Article excerpt

African Americans, haunted by double-digit unemployment rates and federal deficits to cover policy makers with excuses for not funding programs, now face another threat: a "buy now, pay later" federal budget that mortgages the future and proposes tax cuts that favor America's rich.

In January 2001, the nonpartisan Congressional Budget Office (CBO) projected a cumulative federal budget surplus of $2.5 trillion for the fiscal years 2004 to 2008. This March, Congress began working on President George W. Bush's budget proposal, just as the CBO was increasing its projection for the federal deficit this year by 24% to $246 billion. With the proposals for tax cuts the president made in his budget, the CBO projection was an increase in the deficit this year to $287 billion, which represents a cumulative deficit of $1.2 trillion from 2004 to 2008. That's a swing from surplus to deficit of $3.7 trillion in a two-year period. The question is, what happened to all that money?

It's not the war in Iraq. Part of the story, of course, is the current slowdown in the economy. But the clear difference is from changes in the tax code. Here, the math is clear. The CBO projects the president's budget will generate deficits totaling $1.8 trillion from 2004 to 2013. It also projects that the proposed changes in the tax code would cost $1.6 trillion. That's almost a dollar for dollar match.

The president's proposed elimination of the individual tax on dividend income from corporations would cost a projected $388 billion over the 2004 to 2013 period. What would $388 billion get you from the federal government? …

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