Predictibly Enough, We Have Some New Predictions

Remember last Summer when John Snow said the budget deficit was shrinking "faster than expected because of high tax revenues"? Might spoke a little too soon there. Reuters (01.12.06):

"The White House said on Thursday deficit spending in the 2006 budget would soar above $400 billion, well over a July forecast, and the election-year jolt was blamed largely on Hurricane Katrina costs." White House sees 2006 budget gap over $400 billion

Even so, "White House officials believed that by sticking to Bush's economic policies and spending restraint 'we will return to our downward trajectory and remain on (a) path to cut the deficit in half by 2009.'" On the other hand, they believed things were under control last July, when their forecast "had projected the 2006 budget deficit at $341 billion." The Washington Post gets a little snarky (01.13.05):

"This is the third straight year in which the White House has summoned reporters well ahead of the official budget release to project a higher-than-anticipated deficit. In the past two years, when final deficit figures have come in at record or near-record levels, White House officials have boasted that they had made progress, since the final numbers were below estimates." Deficit Could Top $400 Billion

Speaking of those tax revenues, they're not coming from the individual income tax. As Krugman pointed out last July, the increased revenue is from corporations, which "will do little to wipe out the government's overall budget deficit." Being the eternal optimist that he is, our man Snow says "he was confident that plans to cut the country's bulging budget deficit would succeed." We, however, are not as confident. More detail from the Center on Budget and Policy Priorities. As an aside, here's Al-Jazeera's take on the matter.