The federal budget battle: buy now-pay later proposals too costly for African Americans, says economist. (The Economy & You).African Americans African American Multiculture A person having origins in any of the black racial groups of Africa. See Race. , haunted haunt
v. haunt·ed, haunt·ing, haunts
1. To inhabit, visit, or appear to in the form of a ghost or other supernatural being.
2. by double-digit unemployment rates and federal deficits to cover policy makers with excuses for not funding programs, now face another threat: a "buy now, pay later" federal budget that mortgages the future and proposes tax cuts that favor America's rich.
In January 2001, the nonpartisan non·par·ti·san
Based on, influenced by, affiliated with, or supporting the interests or policies of no single political party: a nonpartisan commission; nonpartisan opinions. Congressional Budget Office The Congressional Budget Office (CBO) is responsible for economic forecasting and fiscal policy analysis, scorekeeeping, cost projections, and an Annual Report on the Federal Budget. The office also underdakes special budget-related studies at the request of Congress. (CBO CBO
See: Collateralized Bond Obligation. ) projected a cumulative federal budget surplus of $2.5 trillion One thousand times one billion, which is 1, followed by 12 zeros, or 10 to the 12th power. See space/time.
(mathematics) trillion - In Britain, France, and Germany, 10^18 or a million cubed.
In the USA and Canada, 10^12. for the fiscal years 2004 to 2008. This March, Congress began working on President George W. Bush's budget proposal, just as the CBO was increasing its projection for the federal deficit this year by 24% to $246 billion. With the proposals for tax cuts the president made in his budget, the CBO projection was an increase in the deficit this year to $287 billion, which represents a cumulative deficit of $1.2 trillion from 2004 to 2008. That's a swing from surplus to deficit of $3.7 trillion in a two-year period. The question is, what happened to all that money?
It's not the war in Iraq. Part of the story, of course, is the current slowdown in the economy. But the clear difference is from changes in the tax code. Here, the math is clear. The CBO projects the president's budget will generate deficits totaling $1.8 trillion from 2004 to 2013. It also projects that the proposed changes in the tax code would cost $1.6 trillion. That's almost a dollar for dollar match.
The president's proposed elimination of the individual tax on dividend income from corporations would cost a projected $388 billion over the 2004 to 2013 period. What would $388 billion get you from the federal government? You could run the entire U.S. Department of Education, and all of its programs, such as grants or assistance for low-income students. You could also run the entire U.S. Department of Labor, all of its programs--from Job Corps to helping people find jobs to the Employment Standards Administration The Employment Standards Administration (ESA), the largest agency within the U.S. Department of Labor, enforces and administers laws governing legally-mandated wages and working conditions, including child labor, minimum wages, overtime and family and medical leave; equal to ensure federal contractors comply with equal opportunity hiring laws, as well as fund the Small Business Administration and all of its business programs and staff from 2004 to 2008. With that kind of money from the president's budget being diverted di·vert
v. di·vert·ed, di·vert·ing, di·verts
1. To turn aside from a course or direction: Traffic was diverted around the scene of the accident.
2. to just one tax cut proposal, clearly the programs in those departments are not a high priority.
Instead of seeking more tax equity for African Americans, such as allowing for the deduction of housing expenditures and private mortgage insurance, which lead to disparities in the after-tax income of African Americans and whites living in similar homes, the president has directed his tax cuts to lowering marginal tax rates Marginal Tax Rate
The amount of tax paid on an additional dollar of income. As income rises, so does the tax rate.
Many believe this discourages business investment because you are taking away the incentive to work harder. at the high-income levels.
To make matters worse, our children will wake up in 2014 wondering where the money went when they get the bill for the federal deficit and the unfunded gap in Social Security benefits. Too bad, since the president's tax bill is large enough to close the long-run funding gap for Social Security and Medicare. Wouldn't that be a better legacy to leave our children: a note, paid in full?
William E. Spriggs, a member of the BLACK ENTERPRISE Board of Economists, is the executive director of the National Urban League Institute for Opportunity and Equality.