Trillion-dollar budget surplus looks unlikely
By Brooks Jackson/CNN
July 29, 1999
Web posted at: 5:27 p.m. EDT (2127 GMT)
Wars. Disasters. If none of these things happen in the next ten years, maybe there really will be a trillion-dollar surplus.
But don't count on it.
"There's really no chance at all that this trillion dollar surplus will materialize," says Robert Reischauer of the Brookings Institution. "It's a gleam in the eye of budget projectors."
Carol Cox Wait of the Committee For A Responsible Federal Budget agrees: "We're not going to have a trillion-dollar surplus. We don't know what we're going to have 10 years from now."
But the latest projections of the Congressional Budget Office (CBO) have Washington salivating.
The CBO predicts that over the next 10 years, surpluses will total $996 billion -- not even counting Social Security surpluses. But Congress has been approving new spending for highways and new spending for airports and new military spending is almost certain. Yet that trillion-dollar surplus depends on Congress making big spending cuts.
There is another assumption in the surplus calculations -- that appropriations rise just enough to keep up with inflation. Factoring that in, the CBO says the 10-year surplus shrinks to only $247 billion -- never mind factoring in population growth.
Also the trillion-dollar forecast makes no allowance for emergencies. Take out a normal amount of emergency spending and CBO says the 10-year total shrivels to $46 billion.
But CBO forecasts are like weather reports -- they change. This month's trillion-dollar forecast is more than $180 billion higher than what CBO was predicting in April. Why is that?
"Things are happening," said Federal Reserve Chairman Alan Greenspan, "which we call technical factors, which is another way of saying 'We don't have a clue.'"
So why worry about the dubious assumptions behind that trillion-dollar forecast? Stick around. Like Washington's weather, it'll change.