Federal Deficit

A proposed final report by President Obama's deficit commission warned Wednesday of a fiscal "reckoning" unless major sacrifices are made, but may fail to spur lawmakers to action without support from many msembers of the bipartisan panel in an upcoming vote. The report, ominously titled "The Moment of Truth," immediately drew the support of half of the 14 members needed to move it to Congress for consideration. Only one member ? Rep. Jan Schakowsky (D-Ill.) ? said she would vote against it, while most others said they needed additional time to decide.

WASHINGTON -- A new analysis concludes that President Obama's 2013 budget would bolster the economy in the short term and hinder growth in later years, igniting a fresh round of debate as Democrats and Republicans offer competing economic visions heading into the fall election. The nonpartisan Congressional Budget Office found that Obama's proposal would boost the nation's gross domestic product by 1.4% beyond what is expected under current law, primarily because the White House plan would extend certain tax breaks that are set to expire this year.

The federal government ran up a budget deficit of nearly $780 billion in the first half of the fiscal year amid more spending on TARP, Social Security, Medicare and more, according to the Congressional Budget Office. But the shortfall is actually $53 billion less than it was in the same period last year. From Oct. 1, 2011, through March 30, 2012, the government pulled in $29 billion more in corporate income taxes -- a 53% increase -- due to businesses making higher payments and getting smaller refunds.

The federal government ran up a budget deficit of nearly $780 billion in the first half of the fiscal year amid more spending on TARP, Social Security, Medicare and more, according to the Congressional Budget Office. But the shortfall is actually $53 billion less than it was in the same period last year. From Oct. 1, 2011, through March 30, 2012, the government pulled in $29 billion more in corporate income taxes -- a 53% increase -- due to businesses making higher payments and getting smaller refunds.

Not long ago, shortly after one of a series of meetings on next year's federal budget, President Bush was chatting with a small group of reporters. "Darman just walked out," he said, "and when you see him walking out, I go through a period of about 60 minutes of gloom." Richard G. Darman, Bush's budget director, often makes people here gloomy. It is certainly understandable.

It's easy to call anyone a liar, but let's look at President Reagan's record. He clearly stated time and again before November that Social Security had nothing to do with the federal deficit. Why then is he now agreeing to a reduction in the cost-of-living allowance as a means of reducing the federal deficit? Let's look at another campaign promise. The President proposed that the 1984 cost-of-living allowance would be paid even if the cost-of-living fell below the 3% rise necessary to trigger the cost-of-living allowance.

Rep. Paul Ryan, the Wisconsin Republican who chairs the House Budget Committee, has proposed the most ambitious tax-and-spending plan that Capitol Hill has seen in years. His budget proposal for fiscal 2012 doesn't merely seek to pare the enormous federal deficit and bring the national debt under control, which it would do much more aggressively than the plan President Obama offered in February. It also tries to give much of the federal government a Republican makeover. That makes it more effective as a political document than as a road map to a fiscally sustainable future.

Selective memories: Why can't members of Congress remember that the cause of our country's huge budget deficit is the result of the 1981 federal tax cut? JEAN F. COHEN Los Angeles

Here's one way Congress can trim the nation's record deficits: Do nothing. Keeping Congress gridlocked on budget issues would cut the projected annual federal deficit in half by the next fiscal year and set the trend on a downward path for years to come. Legislation already on the books, if left alone, would do several things: Tax cuts passed under President George W. Bush's administration would expire Dec. 31, generating more revenue. And deep budget cuts passed as part of last summer's debt ceiling deal would be automatically triggered, slashing spending in 2013.

With polls showing him comfortably ahead one day before the Wisconsin Republican primary, front-runner Mitt Romney joined with native son Rep. Paul Ryan to make the case that the GOP has the best formula to bring the federal budget under control. Ryan, who last week endorsed Romney, introduced the candidate at a campaign event at a building supply business in Green Bay, declaring that Romney is the best candidate to head off a "predictable economic crisis" if the federal deficit is not brought under control.

Federal deficits are declining but are expected to continue at near record highs in 2012 as the "sluggish" economy continues to generate lower tax revenues and projected spending cuts lead to a bump in the unemployment rate, the Congressional Budget Office said Tuesday. "How much and how quickly the deficit declines will depend in part on how well the economy does over the next few years," CBO said in its annual Budget and Economic Outlook report. "Probably more critical, though, will be the fiscal and policy choices made by lawmakers as they face the substantial changes to tax and spending policies that are slated to take effect within the next year under current law. " The report shows the annual federal deficit is expected to hit $1.1 trillion in fiscal 2012, down from its record highs of recent years, but still more than anytime between World War II and 2008.

Here's one way Congress can trim the nation's record deficits: Do nothing. Keeping Congress gridlocked on budget issues would cut the projected annual federal deficit in half by the next fiscal year and set the trend on a downward path for years to come. Legislation already on the books, if left alone, would do several things: Tax cuts passed under President George W. Bush's administration would expire Dec. 31, generating more revenue. And deep budget cuts passed as part of last summer's debt ceiling deal would be automatically triggered, slashing spending in 2013.

So once again, political leaders in Washington have lived down to the expectations of business owners and consumers — just about everyone. Having set up a "super committee" to consider how to cut federal red ink by at least $1.2 trillion over 10 years, Congress this week conceded a self-inflicted defeat. Is this failure good or bad for the economy? In the long run it's probably neutral, because it doesn't say anything about the absence of grown-up economic policy thinking in Washington that we didn't know already.

The Treasury Department confirmed this week that the national debt has surpassed $15 trillion -- that's 15, followed by 12 zeros -- a milestone Republicans have latched on to for a fresh attack on President Obama's fiscal management. The timing could not be more conspicuous, with less than a week left before the super committee's deadline and no deficit-reduction plan in sight. A leading Senate Republican said Thursday his party continues to wait for a counteroffer from Democrats, and charged that Obama has been "AWOL" in the discussion.

Returning to South Carolina, a state key to reviving his presidential candidacy, Gov. Rick Perry unveiled what he said was a “bold” tax plan to revive the nation's economy. The Texas governor, speaking at the warehouse of a specialty plastics company south of Greenville, proposed a flat tax plan that critics said would worsen the federal deficit. Perry's plan includes an optional 20% flat tax for individuals and corporations. But he would allow anyone to remain with the current tax system, insuring that no one's taxes would go up and threatening to cut federal revenue by hundreds of billions of dollars a year.

California voters are increasingly downcast about the direction of the country, but -- like their leaders in Washington -- many would rather adhere to party orthodoxy than compromise to address the current economic problems, a new poll shows. The findings offer little guidance for President Obama, who will unveil a jobs package this week that he hopes to push through a polarized Congress. Further troubling for the president: The survey results suggest that Republicans, even in deep-blue California, are winning the rhetorical war of words over how to frame the country's economic troubles, and how to get out of them.

A third consecutive year of massive federal deficits and a slumping economy with high unemployment portrays a bleak fiscal outlook for the U.S., promising a divisive political debate this fall over how to get the country back on track. The Congressional Budget Office said Wednesday the federal deficit was projected to hit $1.3 trillion in fiscal 2011, the third year of shortfalls at levels not seen since World War II. As the economy continues to struggle, unemployment is expected to remain stubbornly high through the end of the year, but dip to 8.5% as the 2012 election approaches, a slight improvement but still high and on par with previous projections by the congressional agency.