Legion of Angels News Archive

WASHINGTON - The next president will inherit a record budget deficit of $482 billion, according to a new Bush administration estimate released Monday.

The administration said the deficit was being driven to an all-time high by the sagging economy and the stimulus payments being made to 130 million households in an effort to keep the country from falling into a deep recession. But the numbers could go even higher if the economy performs worse than the White House predicts.

The budget office predicts the economy will grow at a rate of 1.6 percent this year and will rebound to a 2.2 percent growth rate next year. That’s a half percentage point more than predicted by the widely cited “blue chip” consensus of leading economists. The administration also sees inflation averaging 3.8 percent this year, but easing to 2.3 percent next year — better than the 3.0 percent seen by the blue chip panel.

“The nation’s economy has continued to expand and remains fundamentally resilient,” said the budget office report.

A $482 billion deficit, however, would easily surpass the record deficit of $413 billion set in 2004.

The deficit numbers for 2008 and 2009 represent about 3 percent of the size of the economy, which is the measure seen as most relevant by economists. By that measure, the 2008 and 2009 deficits would be smaller than the deficits of the 1980s and early 1990s, when Congress and earlier administrations cobbled together politically painful deficit-reduction packages.

The administration actually underestimates the deficit, however, since it leaves out about $80 billion in war costs. In a break from tradition — and in violation of new mandates from Congress — the White House did not include its full estimate of war costs.

The White House in February had forecast that next year’s deficit would be $407 billion, which puts the increase in the projections at $72 billion.

Figures for the 2008 budget year ending Sept. 30 will actually drop from an earlier projection of $410 billion to $389 billion, the report said.

The White House still projects that the budget will reach a surplus by 2012, helped by revenues boosted by optimistic economic projections of economic growth.

Still, the new figures are so eye-popping in dollar terms that it may restrain the appetite of the next president to add to it with expensive spending programs or new tax cuts. In fact, pressure may build to allow some tax cuts enacted in 2001 and 2003 to expire as scheduled at the end of 2010, with Congress also feeling pressure to curb spending growth.

John McCain used the news to slam both the Bush White House for its “profligate spending” and Democratic rival Barack Obama for saying he would not try to balance the budget.

“I have an unmatched record in fighting wasteful earmarks and unnecessary spending in the U.S. Senate and I have the determination and experience to do the same as President,” McCain said in a statement.

Obama’s campaign used the new numbers to attack McCain for embracing Bush’s tax cuts. Obama, said campaign policy director Jason Furman, “will restore balance and fairness to our economy by cutting wasteful spending, shutting corporate loopholes and tax havens, and rolling back the Bush tax cuts for the wealthiest Americans, while making health care affordable and putting a middle class tax cut in the pocket of 95 percent of workers and their families.”

The deficit for 2007 totaled $161.5 billion, which represented the lowest amount of red ink since an imbalance of $159 billion in 2002. The 2002 performance marked the first budget deficit after four consecutive years of budget surpluses.

That stretch of budget surpluses represented a period when the country’s finances had been bolstered by a 10-year period of uninterrupted economic growth, the longest period of expansion in U.S. history.

In his first year in office, helped considerably by projections of continuing surpluses, Bush drove through a 10-year, $1.35 trillion package of tax cuts.

However, the country fell into a recession in March 2001 and government spending to fight the war on terrorism contributed to pushing the deficit to a record in dollar terms in 2004.

House Budget Committee Chairman John Spratt, D-S.C., said the new deficit figure confirms “the dismal legacy of the Bush administration: under its policies, the largest surpluses in history have been converted into the largest deficits in history.

Source — MSNBC

WASHINGTON - The Bush administration, dismissing the recommendations of its top experts, rejected regulating the greenhouse gases blamed for global warming Friday, saying it would cripple the U.S. economy.

In a 588-page federal notice, the Environmental Protection Agency made no finding on whether global warming poses a threat to people’s health or welfare, reversing an earlier conclusion at the insistence of the White House and officially kicking any decision on a solution to the next president and Congress.

The White House on Thursday rejected the EPA’s suggestion three weeks earlier that the 1970 Clean Air Act can be both workable and effective for addressing global climate change. The EPA said Friday that law is “ill-suited” for dealing with global warming.

“If our nation is truly serious about regulating greenhouse gases, the Clean Air Act is the wrong tool for the job,” EPA Administrator Stephen Johnson told reporters. “It is really at the feet of Congress.”

White House press secretary Dana Perino said that President Bush is committed to further reductions but that there is a “right way and a wrong way to deal with climate change.”

The wrong way is “to sharply increase gasoline prices, home heating bills and the cost of energy for American businesses,” she said. “The right way, as the president has proposed, is to invest in new technologies.”

At the just concluded G-8 summit at Toyako, Japan, Bush and other world leaders called for a voluntary 50 percent reduction in greenhouse gases worldwide by 2050 but offered no specifics on how to do it.

In a setback for Bush, the Supreme Court ruled last year that the government had the authority under the Clean Air Act to regulate greenhouse gases as a pollutant. Bush has consistently opposed doing that.

Congress hasn’t found the will to do much about the problem either. Supporters of regulating greenhouse gases could get only 48 votes in the 100-member Senate last month. The House has held several hearings on the problem but no votes on any bill addressing it. Both major presidential candidates, Republican John McCain and Democrat Barack Obama, have endorsed variations of the approach rejected by the Senate.

In its voluminous document, the EPA laid out a buffet of options on how to reduce greenhouse gases from cars, ships, trains, power plants, factories and refineries. On Friday, Johnson called the proposals drafted by his staff as “putting a square peg into a round hole” and he said moving forward would be irresponsible.

“One point is clear: The potential regulation of greenhouse gases under any portion of the Clean Air Act could result in unprecedented expansion of EPA authority that would have a profound effect on virtually every sector of the economy and touch every household in the land,” Johnson wrote in the document’s preface Friday.

Attorneys general from several states called the administration’s findings inadequate.

“While we appreciate the effort that EPA staff made in putting together today’s documents, the time has long passed for open-ended pondering — what we need now is action,” said Attorney General Martha Coakley of Massachusetts, which initiated the Supreme Court case.

The EPA said it had encountered resistance from the Agriculture, Commerce, Energy and Transportation departments, as well as the White House, that made it “impossible” to respond in a timely fashion to the Supreme Court decision.

“Our agencies have serious concerns with this suggestion because it does not fairly recognize the enormous — and, we believe, insurmountable — burdens, difficulties, and costs, and likely limited benefits, of using the Clean Air Act” to regulate greenhouse gas emissions, the secretaries of the four agencies wrote to the White House on Wednesday.

Discussing the benefits from reducing greenhouse gases, the EPA said doing nothing more than increasing fuel efficiency standards under last year’s energy bill will reduce the harmful effects of global warming by $340 billion to $830 billion over the next three decades.

In a May draft of Friday’s notice, the EPA had put the benefits to society of further reducing greenhouse gases at $2 trillion.

Friday’s action caps months of often tense negotiations between EPA scientists and the White House over how to address global warming under the major federal air pollution law. It ended with the White House and other agencies citing “extraordinary circumstances” and refusing to review the draft forwarded in June by EPA scientists.

The document released Friday is much more cautious than a determination made in December by the agency that found greenhouse gases endangered welfare, and it also appears to counteract findings of drafts released in May and June that found the Clean Air Act could be an effective tool for reducing greenhouse gases.

“EPA’s approach to this has been completely thrown out by the White House, which is only attempting to stall any kind of cleanup,” said Frank O’Donnell,” president of Clean Air Watch, an environmental advocacy group. “It sounds like the Bush administration is trying to ignore the Supreme Court and to pretend it doesn’t exist.”

Rep. Edward Markey, chairman of the House Select Committee on Global Warming, called the administration’s findings “the bureaucratic equivalent of saying that the dog ate your homework.”

“The White House has taken an earnest attempt by their own climate experts to respond to the Supreme Court’s mandate to address global warming pollution and turned it into a Frankenstein’s monster,” said Markey, D-Mass.

Industry groups still expressed concern Friday over some of the suggestions included in the document, which will be the basis for a future action rule under a new president more inclined to take tougher action to address global warming.

“Our point on this is that EPA has set forth a road map which literally throws the entire way which we manage the environment and economy in complete turmoil,” said Bill Kovacs, vice president of the Environment, Technology and Regulatory Affairs Division at the U.S. Chamber of Commerce.

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On the Net:

EPA Advanced Notice of Proposed Rulemaking: http://www.epa.gov/epahome/pdf/anpr20080711.pdf

EPA Fact Sheet: http://www.epa.gov/epahome/anprfs.htm

Source — Yahoo!