Red Budget Alert
Early next month President Bush will advance to Congress a proposed budget for operations of the federal government for FY 2007. Though agency officials are generally keeping silent (as they are expected to until the budget is officially released), agency and Hill insiders have been spreading the news of what to expect. Specific numbers are hard to nail down, but what we are hearing isn't good.
Recently, Treasury Secretary John W. Snow officially announced that his goal is to make the President look good on his 2004 campaign vow to cut the budget deficit in half by 2009. With a budget deficit of $319 billion in 2005, Snow's Treasury, the Office of Management and Budget, and the White House are all looking for ways to cut the projected deficit by upward of $160 billion. The situation is worse than that as economists are forecasting a deficit in 2006 of $400 billion, so the White House may be looking for $200 billion!
Some believe it is virtually impossible to keep the federal government running with a budget that makes such deep cuts. Nevertheless, agency heads, when they make their annual visits to OMB examiners, are being asked to do their part in reducing growth in government spending. Some were sent back to make adjustments to their initial submissions to the White House. Many agencies will be lucky to see their budgets come in at last year's authorized levels; most domestic agencies can expect massive reductions and zeroing out of specific programs deemed "non-essential."
Bottom line, what the president is expected to offer in his budget is an across-the-board "call for sacrifices." Congress of course can and probably will ignore the President's budget as they have in recent years. Time will tell.
One last item...the debt ceiling is once again about to be exceeded. Undoubtedly the White House will try to downplay that which Secretary Snow will need to do in mid-February-- request that Congress push up the current debt limit above the $8.184 trillion level.