Today, the Congressional Budget Office (CBO), released the preliminary budgetary figures for December 2003. They show that, while in December 2002, the budget was in $5 billion surplus, in December 2003, this has shifted into an estimated $13 billion deficit. Most of this shift has occurred due to increases in spending as revenues have risen since the same period in 2002. Expanding these figures to quarterly data, the fourth quarter of 2003 saw a deficit of $126 billion, as compared to a deficit of $108 billion. So far, this bodes well for the conservative position that spending is the problem. However, when one looks at the breakdown of spending increases, one realizes that domestic discretionary spending is not the problem. It has increased only 3.2 percent between 2002 and 2003. Non-discretionary entitlement spending has increased 4.0 percent for Medicare and 7.7 percent (Medicaid) with Social Security benefits in between with growth of 4.2 percent. The largest component of growth in spending between the fourth quarter of 2002 and 2003 was defense spending which grew at a 15.6 percent rate. If the Bush Administration had not pulled us into the costly (both financially and in terms of the loss of human life) war in Iraq, the budget would be closer to balance with the massive tax cuts geared towards the well off making up much of the difference.

CBO. 2004. Monthly Budget Review, January.

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©2004 Richard B. Goud, Jr.
Updated on 08 January 2004 at 20:38 PST