Budget Relief Coming at Faster Clip
Not just tax but budget relief was the goal of legislation signed last week.
But the latter may come even before serious budget-cuts take effect.
The budget bill calls for balance by the year 2002. One budget watcher with a record for accuracy, however, thinks it will happen in months, not years.
Fred Ross sees a budget surplus of $20 billion to $30 billion in fiscal 1998, the year starting Oct. 1.
And Mr. Ross, a consultant to the Washington Research Group, has been more accurate than most on the budget.
When President Clinton's budget experts, last February, forecast a $126 billion deficit for fiscal 1997, Ross said $70 billion to $80 billion. And he continued moving his prediction down as the monthly numbers showed higher revenues than expected.
Last week, Mr. Clinton put the 1997 deficit at $37 billion.
Congressional experts estimate the new tax bill will result in $9 billion in revenue losses for fiscal 1998 and the new budget bill $10 billion more in spending, Ross says.
But barring a major economic reversal, revenue growth will create a surplus, he predicts. The same economy keeping unemployment at modern lows and the stock market at record highs is sending higher tax revenues into federal coffers.
Clinton says the surplus will exceed $20 billion only in 2002.
Ross cautions that the impact of the capital-gains tax cut is uncertain. It will prompt some investors to sell profitable investments and pay tax on those profits. But how much is unknown.