<p>Which means none of the candidate’s promises are going to come true.</p>
<p>None of the candidates. </p>
<p>And we are not in good fiscal shape.</p>
<p>Jan. 22 (Bloomberg) – President George W. Bush is poised to leave the federal government in worse financial shape than he found it, making it harder for whoever succeeds him to deliver on the promises of this year’s election campaign. </p>
<p>Bush may end his eight years in office with a larger-than- forecast budget deficit approaching 2004’s record $413 billion, as an increasingly likely recession slashes tax receipts and raises spending. He’ll also leave behind a host of thorny, longer-term problems – from the expiration of his big tax cuts in 2010 to spiraling spending on senior citizens – that will dog his successor’s budgets for years. </p>
<p>That means Democratic candidates Hillary Clinton and Barack Obama would find it harder to finance their promised expansion of health-care benefits. Republicans Rudy Giuliani and Mitt Romney would have a tougher time carrying out their pledges to cut taxes. </p>
<p><code>We have a big hole to crawl out of,‘’ says Robert Bixby, head of the Washington-based Concord Coalition, a nonpartisan group that advocates balanced budgets.</code>Any sort of major initiative by the next president is going to be very difficult to do.‘’ </p>
<p>The situation is, in some respects, the mirror image of 2001. Bush, 61, was the first president since John F. Kennedy to take office with a budget surplus, to the tune of $236 billion, giving him considerable latitude in formulating policy. He cut taxes by more than $1.5 trillion over 10 years, increased defense spending and created a new Medicare prescription-drug-benefit program. </p>
<p>Squandered Opportunity </p>
<p>Critics say Bush squandered a chance to put the Social Security retirement program and Medicare health plan for the elderly on a sounder financial footing. Government accountants calculate Social Security will begin paying more in benefits than it collects through taxes by 2017, while Medicare will exceed its spending limits by 2013. </p>
<p>``History will treat him very harshly,‘’ says Robert Reischauer, former director of the nonpartisan Congressional Budget Office and now president of the Urban Institute, a Washington-based research group.
Bush ``came in with an unprecedented opportunity to address the long-run challenges faced by this nation and completely blew it, in part because of events and in part because of policy,'' Reischauer says.
`Rebuild' </p>
<p>The administration defends its record, saying the tax cuts helped revitalize the economy after it fell into recession in March 2001 while much of the additional spending was needed either to ``rebuild’’ the military or wage the war on terrorism in the wake of the Sept. 11, 2001, attacks.
Sean Kevelighan, a spokesman for the White House's Office of Management and Budget, also points the finger at Congress, saying lawmakers were ``unreceptive'' to Bush's second-term efforts to address the future of Social Security. Kevelighan said the government is on a path to balance the budget by 2012.
Wall Street economists are skeptical. They see the deficit rising this year and beyond after falling for three straight years as an unexpected surge of revenue from highly profitable companies and wealthy individuals subsides.
The Congressional Budget Office said Jan. 7 the deficit for the first quarter of the 2008 fiscal year, which began Oct. 1, was one-third higher than a year ago.
``We've seen the best for awhile,'' says Ed McKelvey, a Goldman Sachs Group economist in New York. He reckons it will be at least five or 10 years before the deficit shrinks below 2007's $163 billion.</p>