Stronger than expected growth in tax collections, caused by a rising job base and a vibrant economy, had led government forecasters to reduce their deficit projections for the past three years. In February, the Office of Management and Budget projected a fiscal year 1997 budget deficit of $126 billion. By May, the Congressional Budget Office had reduced that projected deficit to $67 billion. Neither the OMB nor the CBO updated the estimates prior to the summer's budget deal for fear that news of a disappearing deficit would dissipate support for the agreement. By July budget watchers, extrapolating from monthly Treasury Department reports., estimated that the coming year's deficit would be no more than $45 billion. After the legislation was signed, OMB estimated this year's deficit would fall to $37 billion. The CBO projected a $34 billion gap.
"If Congress did absolutely nothing, the federal budget would have fallen into balance as early as next fiscal year," says William Armistead, a vice president at Citizens for a Sound Economy. Congress, of course, did act, in concert with the White House. And their so-called balanced budget act increases spending over current levels, keeping America in the red for at least a few more years.
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|Title Annotation:||US government budget|
|Author:||Lynch, Michael W.|
|Date:||Oct 1, 1997|
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