Backsliding Into the Deficit DitchFrom Deficit to Surplus to Deficit Again

-158

-269-221

-290

-153

69

-22

-108-164

-203-255

126

236

-521

-375

127

-600

-500-400

-300-200

-1000

100200

300

1989 1992 1995 1998 2001 2004Bush I Clinton Bush II

Uni

fied

Sur

plus

/Def

icit

in B

illio

ns o

f D

olla

rs

Prepared by the House Budget Committee Democratic Staff 2/2/04

More Accurate Estimate Shows Even Bleaker Budget Outlook

-502-478-439-447

-397-374-334-324

-389

-521

-355

-650

-550

-450

-350

-250

-150

-50

50

150

250

350

450

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Su

rplu

s/D

efic

it in

Bill

ion

s o

f Do

llars

.

CBO Baseline

Prepared by the House Budget Committee Democratic Staff 2/2/04

CBO Baseline adjusted forPresident’s omitted costs

2002 Bush Budget

2005 Bush Budget

Realistic Bush Budget

In 2003, Tax Cuts Accounted for the Majorityof the Cost of Legislation Passed Since 2001

Tax Cuts55%

Defense, Homeland

Security, and International

28%

Entitlement Legislation

12%

Domestic Discretionary

(Except Homeland Security)

5%

Source: Center on Budget and Policy Priorities and CBO 2/13/04

Domestic Non-Homeland Discretionary Spending Only One-Sixth of Budget

2004 Outlays

Other Mandatory

Medicare

SocialSecurity

Net Interest

Homeland Discretionary

Defense and International Discretionary

Domestic Non-

Homeland Discretionary

Prepared by the House Budget Committee Democratic Staff Source: CBO 1/26/04

Defense, Homeland Security, and 9/11 Response Account for At Least 90

Percent of Funding Increases

55%

74% 69%

17%

10%9%

7%21%

7% 12%

73%

15%

90%90%93%95%

0%

20%

40%

60%

80%

100%

2001 2002 2003 2004Per

cen

t o

f T

ota

l In

crea

se A

bo

ve

2001

Bas

elin

e

Defense Homeland Security 9/11 Response(NYC, Int’l, and Airline Relief)

Prepared by the House Budget Committee Democratic Staff Source: Senate Budget Committee 1/26/04

Defense Increases During Bush Administration

(National Defense Discretionary Budget Authority in Billions of Dollars)

2002 2003 2004 2005 2006 2007 2008 2009 2010 20112002-2011

CBO January Baseline 2001

321.8 330.3 338.9 347.4 356.3 365.5 374.9 384.6 394.5 404.9 3619.0

Policy Increases Excluding Supplemental

20.7 51.8 61.1 72.0 83.2 94.2 105.3 108.7 112.5 116.4 826.0

Iraq/OEF Supplemental

18.4 72.4 59.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 150.7

Total Increase

39.0 124.2 121.1 72.0 83.2 94.2 105.3 108.7 112.5 116.4 976.7

Total Bush Defense Program

360.8 454.5 460.0 419.4 439.5 459.7 480.1 493.3 507.0 521.3 4595.7

Prepared by the House Budget Committee Democratic Staff 1/26/04

Trillions of Dollars 2005-2014

2001 Tax Cut 1.042

2002 Stimulus -0.070

2003 Tax Cut 0.135

Make Above Tax Cuts Permanent 1.233

AMT 0.549

New Tax Proposals in 2005 Budget 0.163

Subtotal 3.051

Corresponding Debt Service 0.722

TOTAL TAX AGENDA $3.773

The $3.8 Trillion Tax AgendaPresident’s Tax Proposals:

Enacted, Proposed, and Hidden

Source: CBO and Joint Committee on Taxation, AMT includes interaction with EGTRRA/JGTRRA permanence

New Tax Proposals are OMB estimates, do not include AMTUpdated 3/10/04

Tax Cuts Larger than Social Security and Medicare Deficit Combined

$14.2 Trillion

$11.9 Trillion

Medicare8.2

0

2

4

6

8

10

12

14

16

Total Administration Tax Cuts Combined Social Security andMedicare HI Deficit

Pre

sen

t V

alu

e O

ver

75 Y

ears

, D

oll

ars

in T

rill

ion

s

Prepared by the House Budget Committee Democratic Staff Source: Center on Budget and Policy Priorities 3/9/04

Social Security3.7

15

16

17

18

19

20

21

22

23

24

1980 1984 1988 1992 1996 2000 2004 2008

Pe

rce

nt o

f GD

P

Reagan-Bush Average Receipts Reagan-Bush Average Outlays

Outlays

Receipts

Receipts Are Way Down; Spending Remains Low

Prepared by the Democratic Staff of the House Budget Committee; Source: FY 2005 Budget 02/04/04

REAGAN BUSH I CLINTON BUSH II