Analyst: $996 Billion Surpluses by 2010
By ALAN FRAM - AP
WASHINGTON (AP), Congress' top fiscal analyst estimated today that excluding
Social Security, there will be $996 billion in budget surpluses over the next decade,
close to the round $1 trillion by which many Republicans want to cut taxes.
Since its last estimate in April, the Congressional Budget Office increased its
estimate of the non-Social Security, 10-year surplus by $171 billion. That increase is
only about half the $333 billion boost that President Clinton announced Monday in the
White House's own 10-year surplus projections since February.
Even so, the new CBO numbers give lawmakers an astounding amount of money with
which to pursue their priorities, particularly when compared with the annual deficits that
until recently dominated Washington's landscape for decades. The White House envisions an
even bigger, $1.08 trillion pot of non-Social Security surpluses over the coming decade.
CBO's annual summertime report, distributed on Capitol Hill, credited the
surplus upsurge to the economy's continuing strong performance and the extra money it has
generated for the government.
``Revenue growth continues to be the engine that drives mounting estimates of
the surplus,'' the agency's report said. CBO also cautioned, however, that as baby
boomers begin retiring in 2010 and relying on Social Security and Medicare, ``Budgetary
pressures caused by increased participation in such programs can easily reverse the
favorable fiscal forces that are operating today.''
The surplus from the part of the budget that includes everything but Social
Security is what both parties feel comfortable using for more spending, tax cuts or both.
Many Republicans want to use that money for tax cuts, while Clinton and many Democrats
want to use most of it for Medicare, defense and other domestic programs. In good
news for the GOP, the CBO will project a $14 billion non-Social Security surplus next
year, up from a $5 billion non-Social Security deficit the agency estimated in April. That
should help the Republican majority in Congress because until now, they have been
struggling to pay for the first year of their tax cut and to craft spending bills.
It is not entirely clear, however, how Republicans will decide to use the money.
Though tax-cutting sentiment is particularly strong in the House, moderate
Republicans in both chambers are leery of a tax-cutting package that much exceeds the $778
billion, 10-year tax reduction that Congress' budget envisioned in April. Asked
what he wanted to do with the extra surplus projections, the Senate Budget Committee
chairman, Sen. Pete Domenici, R-N.M., cited looming needs to prepare Medicare for baby
boomers' retirements and to provide extra funds for education and some other domestic
programs.
``I'm not prepared to do anything until we look at the total picture,'' he said.
CBO estimated the 1999 overall surplus will be $120 billion and next year's, a
record $161 billion. In April, CBO predicted the 2000 overall surplus would be $133
billion. And from 2000 through 2009, CBO projected an accumulated budget surplus of
$2.896 trillion. Clinton's projection for the same period was $2.916 trillion.
Jacob Lew, the White House budget director, said in a statement that both sets
of surplus projections ``show movement in the right direction.''
He also reiterated the White House's insistence that surpluses be used for
domestic spending, Social Security, Medicare and debt reduction ``before making other
decisions on ways to spend the surplus'' in other ways, such as on tax cuts.
Last winter, the CBO envisioned 10-year, non-Social Security surpluses of $787
billion, $37 billion more than the White House estimated. Because the CBO began from a
higher starting point, insiders were not surprised that in updating their figures, the
congressional agency's adjustment was smaller than Clinton's.
