Those warnings were right on both counts.  

The Bush administration revealed Jan. 24 that its fiscal year 2003 budget would run a deficit of $106 billion dollars, compared with the $127 billion surplus Bush was handed when he took office—a $233 billion plunge.  

The same day, the nonpartisan Congressional Budget Office revised its long-term forecasts, citing Bush’s millionaire tax cut as the largest single factor in shrinking the projected 10-year budget surplus from $5.6 trillion to $1.6 trillion—a $4 trillion downswing.  

Responding to the CBO report, AFL-CIO President John Sweeney said, “Yes, war and recession have played a big part in creating near-term deficits, but the single largest factor in our crushing long-term economic fortunes is the millionaire tax cut pushed through by President Bush last year. About one-third of the breathtaking $4 trillion decline in the 10-year surplus forecast is due to last year’s tax cuts, which gave more than 38 percent of its benefits to the wealthiest 1 percent of taxpayers.”  

At a Capitol Hill press conference, Senate Majority Leader Tom Daschle (D-S.D.) said, “We’ve said all along that deficits were going to occur if we passed tax cuts of the magnitude that were passed last spring.”  

So far, the White House has released just selected budget details and will release the entire budget proposal Feb. 4. From the revealed figures, Bush’s budget will include large increases in domestic security programs and national defense spending. To pay for those increases, Bush likely will have to reverse the pledge he made last year not to dip into Social Security funds to pay for other government programs.  

“Social Security, the only guaranteed retirement program that all Americans can depend on all the time, will be further compromised as its surpluses are drained away to take up the revenue shortfalls created by last year’s tax cut,” Sweeney said.

Administration officials admitted that the Bush budget would contain cuts in many government programs and hold spending increases for others, except for national security, at very low levels. 

Postponing some of the Bush’s tax breaks for the nation’s wealthiest taxpayers could alleviate some fiscal problems and free up funds for vital working family programs, according to Sen. Edward Kennedy (D-Mass.). Kennedy has proposed freezing some future tax breaks for the very wealthy while ensuring most families receive all the scheduled rate reductions.  

“These future tax cuts for those at the top are not part of the fight against the recession. They are not scheduled to occur until long after the economy emerges from the downturn. In fact, taking fiscally responsible action now will actually help the economy—by leading to reductions in long-term interest rates that have remained stubbornly high because of the fear that unaffordable tax cuts will lead to growing federal deficits throughout the decade,” he told a National Press Club audience Jan. 16.  

Saying Kennedy’s proposal deserves “serious examination,” Sweeney said it “would restore the nation to sounder economic footing, better positioning us to meet urgent needs in health care, education and retirement security and to avoid saddling our children with staggering and irresponsible debts.”