Economy & Budget

51,000 new jobs. 4.6 percent unemployment rate. More Americans employed than ever before. Plummeting gas prices. All-time stock market highs.

While this news alone proves the strength of our economy, just yesterday, President Bush announced that the federal deficit has been cut in half three years earlier than he originally promised. Unfortunately, Democrats are too consumed with casting a dark shadow on Republican policies to acknowledge the great strides our economy has made in the past several years.

The facts, however, are indisputable: Republicans' responsible fiscal policies and pro-growth initiatives have put money in the pockets of American families and raised the standard of living nationwide.

The numbers released by Treasury yesterday demonstrate the positive impact that tax relief can have on our economy and our fiscal outlook. By lowering the tax burden and encouraging more business investment and hiring, Congress helped create the conditions for economic growth, which has led to a surge in revenue flowing into the Treasury. (FY 2005 revenues were 14.5 percent higher than the year before and FY 2006 tax receipts are 11.8 percent above last year.) Due to these pro-growth policies, the deficit is dropping, but we must do even more to restrain spending so that we can balance the budget. This is especially critical in preparing the way as we work to address the budgetary challenges that face us in the near future with the retirement of the baby-boom generation.

The Treasury numbers for FY 2006 show:

* The FY2006 budget deficit was $248 billion, or 1.9 percent as a share of the economy (GDP) -- below the average of the past 40 years of 2.3 percent of GDP.

* This year's deficit has fallen by $71 billion from last year's actual deficit of $318.7 billion.

* The FY2006 deficit is 41 percent lower than the OMB's original projection of $423 billion in February of this year.

In his press conference today, President Bush demonstrated that, in addition to being in a state of denial on the war in Iraq, he is also in denial over our nation's historic fiscal downturn.  President Bush and Congressional Republicans have squandered the $5.6 billion budget surplus they inherited and transformed it into a $4 billion deficit.  America deeply needs a new economic direction, one that Congressional Democrats are ready to provide.  Democrats will restore fiscal discipline by re-implementing pay-as-you-go budget rules.  Restoring the pay-go rules is the common-sense approach to getting our country back on the right fiscal track.

Congressional Republicans have been working to promote pro-growth economic policies and we are continuing to see the positive results day-in and day-out.  As a result of our work, the federal deficit has declined for the second year in a row and has been cut in half three years ahead of schedule.

By restraining spending in Washington and allowing Americans to keep more of what they earn, we are creating jobs and making America more prosperous.  Democrats in Washington believe we can tax our way out of this deficit, but Republicans know better.

And there's more good news about the economy in addition to a shrinking budget deficit. The Dow recently reached a record-high.  Disposable personal income is up more than 14 percent since 2001.  Home ownership is higher than ever, with two-thirds of Americans owning homes.  Unemployment is at its lowest average since the 1960s.  And nearly 6 million jobs have been created since 2003.

More Americans are working and keeping more of what they earn.  As a result, revenues are up and the deficit is down.  Our tax cuts are working, and the American economy continues to grow.

With last week’s announcement from the Bureau of Labor Statistics boasting a 4.6 national unemployment rate, now is the time for Republicans to tout their policies that have made a difference to the American family. Despite what Democrats want people to believe, our economy is on the right track. The real gross domestic product increased 3.5 percent in 2005. The economy has been growing for 17 straight quarters, and real household net worth is at an all-time high a $52.1 trillion.

I can speak locally about my constituents in California—I get letters from folks back home urging support for Small Business Administration loans and to keep taxes low.  People want their money back in their pocket to reinvest in businesses, and create even more jobs. They don’t want the government making financial decisions for them.

When my Republican colleagues and I took back the House in 1994, unemployment numbers from major metropolitan areas in my district—Fresno, Madera and Modesto, were more than double what they are today. This country needs Republican leadership to create more jobs and stimulate the economy.

If enforced, this ruling could have a devastating affect on agriculture. When American farmers are harvesting this season, they shouldn’t have to worry about whether or not they have legal protection when it comes to combining their corn and beans. The EPA can say all they want about not intending to include agriculture in this ruling.  That’s the same thing they told me 25 years ago when the superfund law was passed.  Now we’ve got farmers fighting lawsuits all over the place.  I hope Administrator Johnson’s visit to Iowa will show him just how difficult it will be on family farmers.

Recent Congressional Budget Office figures demand our attention, but not for the reasons my colleague Jim Nussle mentions.

The CBO has confirmed that the budget deficit for 2006 will be one of the largest in history. This report comes on top of the three largest deficits in history, all of which have occurred since President Bush took office. The $250 billion deficit now estimated for 2006 marks a deterioration of $486 billion from the $236 billion surplus recorded for 2000. When the Social Security surplus is excluded from the calculations - as it should be - the deficit for 2006 is likely to be at least $420 billion. Though today's estimates for 2006 are not as pessimistic as some earlier estimates, it is clear that the budget remains on the wrong track, with the Congressional Budget Office and even the Bush Administration estimating that deficits will be even larger next year.

The large deficits that have occurred on this Administration's watch have resulted in a sharp spike in our national debt. Since 2002, the Republican Congress has been forced to raise the legal limit on our national debt four times, by a total of $3 trillion. A growing portion of taxpayer dollars is being spent to pay the interest on this mountain of debt, nearly 45 percent of which is now held by foreign investors. Meanwhile, U.S. global competitiveness has fallen from first to sixth in a study released just last week, in part because of the burden of large deficits and growing debt.

Democrats support a return to a fiscally responsible path, with budgets that achieve balance and tough budget enforcement rules. This CBO report is the latest reminder of how much work needs to be done to put our nation's fiscal house back in order.

Since 2004, the Commitee on Ways and Means of the U.S. House of Representatives has been conducting a broad review of the tax-exempt sector. As the sector increases in size, scope, and economic impact, the need for Congress to conduct comprehensive oversight grows as well.

Educational organizations comprise one of the largest segments of the tax-exempt sector, and most of the activities undertaken by educational organizations clearly further their exempt purpose. The exempt purpose of intercollegiate athletics, however, is less apparent, particularly in the context of major college football and men's basketball programs.

The continued surge of federal revenues, generated by strong economic growth, have reduced the fiscal year 2006 budget deficit to $250 billion, according to the estimate released Friday by the Congressional Budget Office. These figures include amounts spent in 2006 in Iraq and Afghanistan and Hurricane Katrina recovery efforts. This estimate is sharply lower than the $296 billion figure estimated by the Office of Management and Budget in July, and even lower than CBO's $260 billion estimate in August.

Thanks to a responsible budget blueprint and pro-growth policies, we're not only seeing the deficit fall, but also laying a solid foundation to meet our nation's immense future challenges. To ensure this trend of deficit reuction continues in the longer-term, we've got to remain diligent in our efforts to keep our economy strong and restrain federal spending.

Rep. Jim Nussle is Chairman of the House Budget Committee.

Economic issues still have a big impact on elections and recent news has been good. We have got 18 quarters of growth, unemployment is down to 4.6 percent, gas prices are down, and the stock market is doing well. I think that is going to help the President’s numbers and it will certainly help Republicans.

The other driving issue that everyone is going to want to talk about is security -- border security, where immigration is concerned, and of course the situation in Iraq. So candidates just need to go home and talk about the work we have done that has affected national security, that has affected the economy and I think the voters are going to respond.