John Spratt: “we all know the circumstances last year when we voted to repeal temporarily the estate tax. OMB was predicting a surplus…”

“we all know the circumstances last year when we voted to repeal temporarily the estate tax. OMB was predicting a surplus of $5.6 trillion over the next 10 years. Today that surplus is gone, vanished, thanks to tax cuts, terrorists and recession, and overestimation of the surplus in the first place. This year we expect a budget in deficit by $314 billion, excluding Social Security. Over the next 10 years we expect that deficit to be $2.6 trillion. We will consume all of the Social Security surplus and all of the Medicare surplus if that is true. Even last year, estate tax repeal had to be shoehorned into the budget to hold the tax cut to no more than $1.3 trillion. That is why there was a repeal one year, reinstatement the next year. Even this year those who favor repeal do not favor it until 2010, 2011. They are putting it off. And they are understating the cost because the near-term cost seems low, but look at this chart and you will see what the long-term cost is. The long-term revenue loss in the second decade of this century resulting from the repeal of the estate tax will be $1.1 trillion. How much is $1.1 trillion? That is one-third of the cost, 40 percent of the cost of making Social Security solvent. That is enough to pay for a robust, full-fledged Medicare prescription drug package. That is the opportunity cost of what we are doing. Last year you needed a shoehorn to get it into the budget. This year you will need a shovel.”