In the US Presidential race
, much of George W. Bush
and Al Gore
sparring has centered around how best to use the federal budget surplus
. Unfortunately, there is no clear consensus
on how large this surplus
The Democrats have recently estimated the total on-budget surplus (that is, net of the current surpluses generated by Social Security) at $1.879 trillion for the 2001-10 period, relying on the economic assumptions of the Office of Management and Budget (OMB), an agency within the Executive branch. The Republicans, on the other hand, have relied on the estimate of the Congressional Budget Office (CBO) of an on-budget surplus of $3.387 trillion over the same period. Of course, each agency has been accused of partisan bias.
While both estimates are predicated on differing economic assumptions (such as predicted increases in inflation and gross domestic product), both assume that total on-budget spending will continue to rise according to current statutory spending caps through 2002, and at the rate of inflation thereafter. It is interesting to note that the CBO has recently completed a study which suggests that they have posted a better economic forecasting record than the OMB. Review this study at http://www.cbo.gov/showdoc.cfm?index=2241&sequence=5.
If there is a numerical battleground in this election, it is the difference between the OMB and CBO estimates. Gore, for example, has called for $500 billion in targeted tax cuts over the 2001-10 period, while Bush pledges to enact a $1.3 trillion across-the-board tax cut. Gore's characterization of Bush's plan as "risky" seems to make sense if you accept the OMB estimate, while Bush's charge that Gore's tax cut is too small seems to make sense if you accept the CBO estimate.
This is certainly one of the more complex issues American voters will have to consider as Election Day approaches; all the more so because there is no statistical consensus.
Sources: CBO (7/18 Update), OMB's Mid-Session Review, www.algore2000.com, www.goergewbush.com