Newspaper article The Florida Times Union

FEDERAL BUDGET; Bad News Coming

Newspaper article The Florida Times Union

FEDERAL BUDGET; Bad News Coming

Article excerpt

So the patient went to the doctor and said, "Doc, how was my checkup?"

The doctor said, "I've got good news and bad news."

And the patient said, "OK, just tell me the good news. I'll take the bad news some other day."

Well, that's the logical reaction to the good news that government revenues were up. But all the bad news has been put off for another day.

Economics is called the "dismal science" for a reason. Yet, we ignore it at our peril.

First, when the Bush administration announced the federal deficit was expected to drop by 7 percent in fiscal 2006, it showed the power of tax cuts to stimulate the economy.

At the same time, however, the big fiscal picture is bad.

DISCIPLINE LACKING

There is still a big deficit and "fiscal discipline has been lacking," said Kevin Hassett, director of economic policy studies at the conservative American Enterprise Institute, in The Wall Street Journal.

As the bipartisan Concord Coalition reported: "The revenue boost fueling the improvement may be the result of temporary factors and, in any event, leaves us with a debt that is still growing faster than the economy -- an ominous prospect with the huge fiscal challenges of the baby boomer retirement beginning in just three years."

Other points made by the coalition:

-- Adjusted for inflation, federal revenues are at the same level as five years ago.

-- As a percentage of gross domestic product, revenues fell from 2000 to 2003.

-- Federal spending as a share of gross domestic product has risen in recent years.

So while taxes are being cut, spending is not -- thus, the deficit.

Meanwhile, a war is being fought.

Social Security and Medicare are on unsustainable courses. And our national leaders are kidding themselves about the budget.

President Bush has proposed a bipartisan commission to examine entitlements.

Commissions and reports in the nation's capital are hardly rare, but they can serve to raise awareness and lead toward solutions.

As Charles Blahous, special assistant to the president for economic policy, said during a Concord Coalition panel discussion on its Web site: "Here we truly have critical and fundamental challenges before us that will influence the type of America, certainly in an economic sense, that we will leave behind for our children and grandchildren. …

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