Federal revenues would plummet $1.7 trillion over 10 years compared to baseline projections, and deficits would top $2 trillion through 2016 if President Bush's fiscal 2007 budget proposals are implemented, according to new estimates by the Congressional Budget Office.(From Tax Analysts.)
Yes, the numbers are bad. So bad, in fact, that they won't happen. The tax cuts, as proposed, will not be passed. Of course, the budget cuts, as proposed, will not pass either.
However, tucked away in the CBO report is the following:
The mandatory spending proposal that would have the largest effect on the budget is the creation of individual Social Security accounts. That policy would increase outlays by an estimated $312 billion between 2007 and 2016, CBO estimates. (The Administration projects much higher outlays—$712 billion over the 10-year period—chiefly because it assumes that two-thirds of eligible people would sign up for individual accounts, whereas CBO estimates that about one-thirdwould participate.)In other words, the CBO report assumes that the number of people who would elect to participate in the proposed Bush Social Security reform would only be half of the number the Administration estimated.
The really good news for the President is that his Social Security reform will not pass, so the additional $1.7 trillion in budget deficit predicted by the CBO will only be $1.4 trillion.