As sports fans everywhere recovered from the excesses of the Super Bowl festivities, President Bush released his $2.4 trillion budget for the 2005 fiscal year.
Overall, the plan includes big increases for military and homeland security,while either cutting or holding down the growth in spending for most other programs.
Military spending is due to increase just over 7 percent to $401.7 billion, not including the costs for military operations in Iraq and Afghanistan. That money, which could be as much as $50 billion, will be sought after the November election.
One number that jumps off the page is the projected deficit for this year of $521 billion, which falls to $364 billion for the 2005 fiscal year -- again, not including the cost of the campaigns in Iraq and Afghanistan. But of course, the White House expects to cut the deficit to $237 billion by 2009.
The proposed budget also holds some items that may be of particular interest to accountants. Among the highlights: The Bush plan calls for making his tax cuts permanent (after all, it is an election year). It also includes tax credits to help uninsured people buy health coverage.
Under the proposed plan, the Securities and Exchange Commission would get a 9 percent increase in its budget, bringing its coffers to $893 million. The commission would actually have a total budget of $913 million, because it would carry over $20 million from fiscal 2004 earmarked for hiring attorneys and accountants that it didn’t spend. The SEC budget also includes $18.7 million to add some 100-plus positions, with 44 of them slated for its Investment Management Division.
The 2005 budget plan also includes the creation of Lifetime Savings Accounts, Retirement Savings Accounts and Employer Retirement Savings Accounts to replace defined-contribution savings plans in the tax code.
The LSA would be an all-purpose savings account for augmenting retirement, health care, education and emergency needs with annual contributions of up to $5,000 in after-tax dollars. Individual contributions to RSAs, which would be dedicated solely to retirement savings, would be capped at $5,000 per year, similar to the contribution and distribution requirements for Roth IRAs. ERSAs would follow existing rules for 401(k) plans, subject to certain simplifications, with employees able to defer up to $13,000 annually in wages, with that amount increasing to $15,000 in 2006. Conversions from existing IRAs and defined-contribution plans to the new savings accounts are outlined in the budget proposal. Defined-benefit plans would be unaffected.
On a side note, it’s interesting that the budget release coincides closely with one of the year’s biggest gambling events. Maybe there ought to be office pools on what the budget will include -- the odds might be better, especially in an election year.
And speaking of odds -- perhaps one of the most interesting things about the budget is the fact that so many people will spend so much time poring over it. Yet, what are the odds that the budget is any sort of realistic guideline to what the government will really spend?
I’m not a gambling woman, but my guess is that they’re not very good.
