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![handle is hein.taxfoundation/srbjxz0001 and id is 1 raw text is: TAX 1_1W__
FOUNDATION
April 1993, No. 19
The President's Fiscal Year 1994 Budget
The Clinton administration has released its
fiscal 1994 budget, which lays out in detail
proposals contained in its February economic
statement, A Vision of Change for America.
The budget focuses on the dual goals of deficit
reduction and increased spending on
Figure 1
Clinton Deficit
Reduction Breakdown
- $60 billion
- $91 billion
- $296 billion
Total Deficit Reduction
FY'94-FY'98
$447 billion
Source: Office of Management and Budget.
Figure 2
Presidential
Spending and Taxing
5
4-
2 2.8%
CD 3 2.50/
<0
-1
-2
Outlays
Source: Tax Foundation
El Reagan '81-89
D] Bush '89-93
FA Clinton Budget '93-97
4.6%
-1.4%
Receipts Non-Defense Discretionary
investments. On the first goal, the president's
plan proposes to narrow the deficit to $250 billion
by FY'98, compared to the record FY'93 deficit of
$322 billion.
On the second goal, the president has
proposed increased investment spending totaling
$140 billion over the FY'94 to FY'98 period. This
spending will mean discretionary spending caps
set for FY'94 and FY'95 by the 1990 Budget
Enforcement Act will be exceeded.
The Clinton budget proposes a 34 percent
increase in federal revenues and a 21 percent
increase in federal spending over five years. For
FY'94, revenues would go up 9.2 percent and
spending would rise 3.3 percent over FY'93 levels.
The Deficit
The Clinton administration's budget claims
$447 billion of total deficit reduction over five
years from baseline deficit growth. Figure 1
breaks the deficit reduction into tax increase and
spending cut components.
Despite the substantial deficit reduction
claimed, the actual annual deficit is projected to
remain high, as Table 1 indicates. The era of
greater than $200 billion deficits that began in
1983 continues uninterrupted through the
president's five-year budget proposals.
Figure I indicates that there are over three
dollars of tax increases for each dollar of spending
cuts in the budget. This ratio understates the
actual tax increases compared to spending cuts in
the budget. Not included in the $296 billion of
tax increases are $18 billion in fee increases. In
addition, the deficit reduction components in
Figure 1 are measured from the administration's
deficit baseline which is markedly different from
the deficit baseline of both the Congressional
Budget Office (CBO) and that estimated by the
outgoing Bush administration. Of the $447 deficit
reduction claimed, $92 billion can be traced to a
deficit baseline inflated above the CBO's baseline,
By Chris R. Edwards
Economist
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