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Economic News, Data and Analysis

Budget Fiction

Bush’s final budget will be released tomorrow – here’s the link once it goes live. I don’t think anyone is expecting this to be anything but DOA on capital hill.
The bottom line will probably show growing deficits in next year or two, and then some improvement thereafter. However, the supposed improvements later in the budget window, will be an purely an illusion since the budget will likely:

  • not include full out-year costs for military operations in Iraq.
  • not include cost of AMT reform.
  • assume large cuts in health care for the elderly and poor.

These are tricks used by the administration in recent budgets, and looks to be the same this year as well according to press reports.

In his new budget, to be unveiled Monday, President Bush will call for large cuts in the growth of Medicare, far exceeding what he proposed last year, and he will again seek major savings in Medicaid, according to administration officials and budget documents….The president’s budget will not seek money for another full year of the wars in Iraq and Afghanistan.

Update: Looks like the war spending included won’t even include a full-year request.

Pentagon won’t detail war spending plan – Los Angeles Times

WASHINGTON — When the Pentagon unveils its budget request Monday for the next fiscal year, it will back away from a commitment it made to Congress just a year ago — to estimate how much the wars in Iraq and Afghanistan are likely to cost.
Last year, for the first time since the wars began, department budget officials detailed war spending plans for the year ahead at the same time it told Congress what its normal operating expenses would be.
But this year, although the Pentagon will go into great detail about how it plans to spend the billions of dollars it gets to run its normal operations, it will include only what officials call a “place-holder” for war funding.

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