President Bush delivered a proposed $2.57 trillion budget to Congress on Monday. The budget includes significant cuts in some domestic programs as well as an increase in military spending and international development aid.
William Gale, senior fellow of economic studies at the Brookings Institution, discussed President Bush’s propsed 2006 budget.
Thanks for joining us this afternoon. President Bush’s budget raises a lot of interesting issues. Rather than making any long opening statement, I’ll turn directly to questions.
Rancho Palos Verdes, Calif.:
Mr. Gale, is there any way to compare what this budget looks like as opposed to how the administration was projecting this year’s budget would appear when they entered office in 2000? Also, do you have any say in who is chosen to be research assistants in the economics studies program? If so, I am about to submit my application and would be eternally grateful if you put in a good word!Thanks!
Thanks for your question. I won’t get into employment issues here, just the budget!
In 2000, everyone projected very large surpluses as of 2005. Since then, the surplus has fallen/deficit has increased by about 5.4 percent of GDP (that is, the 2005 deficit compared to the 2000 surplus). Most of the decline is due to lower revenues, some due to higher spending. But in any case, the deficit is far worse currently than was expected, even with the President’s policies, in 2001.