The Congressional Budget Office (CBO) released its report on The Budget and Economic Outlook: Fiscal Years 2008 to 2018. I am off to a Budget Hearing Committee, and this is a lengthy report, but at first glance this is what stands out to me.
According to the report, the budget deficit fell in 2007 for the third year in a row. It dropped from $316 billion in 2005 to $248 billion in 2006 to $163 billion in 2007. Revenues in 2007 totaled $2.6 trillion (18% of the GDP), which is a 6.7% increase from the previous year.
In 2008 the federal government is expecting a 3.4% increase in tax revenue despite the economic downturn. So, if government spending could increase by 3.4% or less, the deficit will stay the same or go down. Perish the thought! Who really believes this Congress will hold fast to fiscal responsibility and keep spending below 3.4%? Not me. In that scenario we would actually have a surplus, even in the current economic condition of this country. But back to reality…
The real question is, will Democrats remain within the 3.4% increase in spending?