President George W. Bush's administration slashed its 2001 budget surplus forecast by more than 120 billion dollars Wednesday, citing tax cuts and the slowing US economy.
The White House sliced its forecast to 158 billion dollars for the 2001 fiscal year ending September 30 from the 281 billion dollar surplus projected in its April budget.
The figure was also dramatically down from the record surplus of 236.9 billion dollars last year.
"The lower surplus is due largely to the year-long economic slowdown and the decision to incorporate immediate fiscal stimulus," the White House Office of Management and Budget said in a statement.
Of the total forecast surplus, 157 billion dollars would be accounted for by the social security retirement trust fund, it said.
"Despite a nearly stagnant economy, the government's finances are remarkably sound," the statement said.
"The budget's enormous surpluses have allowed us to deliver significant tax relief to working Americans, providing badly needed fiscal stimulus to counteract the year-long slowdown in the economy," it added.
"Even while weathering the slowdown and taking action on tax relief, we continue to take in huge surplus revenues, and to use the extra receipts to steadily reduce the nation's outstanding debt."
The overall surplus was forecast at 173 billion dollars in 2002, compared to April's forecast of 231 billion dollars.
Over the 10 years from 2002 to 2011, the surplus would total 3.113 trillion dollars, it said, down from the 3.433 trillion dollar estimated in April.
But future tax cuts would now be limited by the budget constraints, the White House said.
"Both this year and next year, the overall budget surpluses are equal to the surpluses generated by Social Security payroll taxes and interest earnings," the statement said.
"The president and Congress are both committed to preserving the social security surplus for debt reduction. As a result, the additional surplus available for new spending or further tax relief in the next few years is limited."
Future spending or tax cuts would have to be offset from other areas of the budget, the White House said -- WASHINGTON (AFP)
© 2001 Al Bawaba (www.albawaba.com)
