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By Charles Pugsley Fincher, A Spin-Off of ThadeusandWeez.com
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From WashingtonPost.com :

Budget Plan Assumes Too Much, Demands Too Little
By Jonathan Weisman
Washington Post Staff Writer
Tuesday, February 7, 2006; A10

President Bush's budget blueprint would bring the federal government's budget deficit under control by decade's end. But to do that without raising taxes, the White House would need a sweeping tax reform that it has avoided proposing and a swift end to the war in Iraq.

The budget plan for fiscal 2007 underscores what budget analysts of all political stripes have been saying for years: The goals of balancing the budget, waging a global fight against terrorism and making Bush's first-term tax cuts permanent may be fundamentally at odds.

Under the budget plan, the deficit would jump from $318 billion last year to $423 billion in 2006, then slide back down to $183 billion in 2010. In 2011, the last year of the White House's projection, the deficit would again begin to rise, to $205 billion, reflecting the cost of extending Bush's tax cuts beyond their 2010 expiration date and enacting a proposed Social Security restructuring that would cost $57 billion in that year alone.

But even getting there requires some heroic assumptions.

The president's budget acknowledges the cost of Bush's call to make his tax cuts permanent -- $1.35 trillion over the next decade and nearly $120 billion in 2011 alone. But beyond 2007, the budget assumes no military expenditures in Iraq or Afghanistan and no effort to address the unintended effects of the alternative minimum tax, a parallel income tax system that was designed to hit the rich but has instead increasingly pinched the middle class. It also assumes Congress will cut domestic spending every year after 2007.

Those factors led Goldman Sachs economists to tell clients yesterday that the deficit forecasts are "unrealistic."

02.07.06

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