CBO Says US Budget Will Be In Deficit For Next Four Years

by Leroy Baker, Tax-News.com, New York

29 August 2002

Releasing its latest figures on Tuesday, the non-partisan Congressional Budget Office (CBO) announced that the US budget is likely to be in deficit for the next four years, and will only move back into the black in any kind of substantial way if last year's tax cuts sunset in 2010 as planned. However, the White House is pushing to make President Bush's tax cut package a permanent feature of the US tax code, casting some doubt over the country's future economic health.

In its regular update on the state of public finances, the CBO revealed that an unexpected drop in tax revenue has also impacted adversely on economic predictions for the future - the drop in revenues so far this year has reportedly been the sharpest since 1946.

'The drop in the stock market seems likely to have reduced tax receipts from realisations of capital gains,' the Budget Office observed this week. 'But the drop in revenues went far beyond what can be explained with by such temporary factors or by the reported weakness of incomes during the recent recession.'

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