New Budget Numbers Narrow The Gap Between White House, Congress -- Dec. 2, 1996
Rubin: Timing Perfect For Balanced Budget -- Nov. 26, 1996
Congressional Analysts Project Higher Growth
WASHINGTON (AllPolitics, Dec. 13) -- The Congressional Budget Office has revised its economic forecast from last May, projecting higher growth through the year 2000 and lower government spending on Medicare and Medicaid. The probable result: a much lower federal budget deficit projection.
The new report from CBO, Congress' nonpartisan budget analysis office, could help clear a path to a balanced budget agreement in a moment when the White House and congressional Republicans are talking almost nonstop about now much they're going to cooperate on the budget next year.
CBO will not publish its deficit projections until early next year, but in a preliminary report released Thursday, the office predicted 2.3 percent economic growth for 1997, 2 percent for 1998 and 2.2 percent for 1999. Those numbers are up from CBO's May 1996 forecast of 1.9 percent, 2 percent and 2.1 percent for the same years. CBO also expects Medicare and Medicaid spending to Decline modestly.
If it sounds anti-climactic, it isn't. The slight adjustments have multi-billion dollar implications for congressional and White House budget writers. Their attempts to forge a balanced budget agreement in 1995 and early 1996 died over disputes between CBO's economic forecasts and the more optimistic projections from the Office Of Management and Budget, the White House's team of budget analysts.
CBO's new forecasts were released a month early at the request of congressional Republicans, in an effort to minimize differences with OMB, which is expected to issue its own report in February.
While it's far too soon to predict the chances for successful budget negotiations, Lawrence J. Haas, an administration spokesman, told The Associated Press, "The more we know and the earlier we know it, the easier it should be to bridge the gaps" between the two sides' differing assumptions, he said.
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