Surplus projections reach $5.6 trillion

The Congressional Budget Office released a report Thursday forecasting an overall budget surplus of $5.6 trillion during the next decade, $1 trillion more than it predicted six months ago. \nWith only $3.1 trillion of the surplus committed to Social Security, Rep. John Hostettler, R-8th, is calling for "significant, across-the-board tax relief."\n"The federal budget is balance, we're paying down the national debt, and we've stopped the raid on the Social Security Trust Fund," he said in a press release. "Now the government has a moral obligation to return a significant portion of the remaining surplus to the American people so they can pay off their own bills and debts."\nMichael Jahr, a Washington spokesman for the Congressman, said Hostettler would support President George W. Bush's proposed $1.6 trillion tax cut. The cut -- a central plank of Bush's presidential campaign -- would cover all tax brackets during the next 10 years.\n"We still have to take a look at the details of his proposal," Jahr said. "But the congressman is very supportive of the principle. Besides an across-the-board cut, he'd like to see the marriage tax and the estate tax done away with."\nJahr said Hostettler would be willing to support a compromise with Democrats, who have openly criticized the size of the proposed cut.\n"He'd work with the Democrats," Jahr said. "He's always in support of tax relief."\nA compromise would be likely with an evenly split Senate and narrow Republican edge in the House, Jahr said. But he said Bush's tax cut has picked up momentum after an endorsement from Federal Reserve Chair Alan Greenspan. \nIn a testimony before the Senate Budget Committee last week, Greenspan said he would favor tax cuts instead of federal spending. He had previously denounced Bush's tax plan as "too large," stating that he would rather see the money go to pay down the national debt.\nBut, aware of the more optimistic predictions, Greenspan switched his position.\n"The most recent data significantly raise the probability that sufficient resources will be available to undertake both debt reduction and surplus-lowering policy initiatives," he said. "Accordingly, the trade-off faced earlier appears no longer an issue."\nEchoing Bush's position on across-the-board tax relief, Greenspan said it might give the economy a boost.\n"Should current economic weakness spread beyond what now appears likely, having a tax cut in place may in fact do noticeable good," he said.\nHostettler said he views Greenspan's comments as a mandate for Bush's proposed cut.\n"I agree with Greenspan's assessment that if the surplus is not returned to taxpayers it will instead disappear into an abyss of government spending," he said.\nAccording to the Congressional Budget Office, the surplus for the upcoming budget cycle in 2002 will run at about $313 billion. The 2001 budget is estimated to be at $281 billion.\nThe Associated Press contributed to this report.