After two years of larger than expected increases, future budget projections to be released in August may show no increase or a slight decrease in the size of the surplus over the next decade. Analysts believe this trend could have a major long-term impact on transportation funding.
During a hearing of the House Budget Committee, officials from the Congressional Budget Office and the Office of Management and Budget hinted that the days of huge increases are over.
This could make it more difficult, observers believe, to maintain the guaranteed spending provisions that were contained in the Transportation Equity Act for the 21st Century (TEA-21).
Over the past two years, surplus projections far exceeded earlier estimates, largely because tax revenues flowing into the Treasury were larger than expected due to a strong economy. The recent downturn in the economy, along with the $1.35 trillion tax cut passed by Congress, will likely bring the surplus down over the next decade.
Daniel Crippen, director of the Congressional Budget Office, told the House panel that the effects of the tax cut will come into play in fiscal years 2003 and 2004, when Congress runs a risk of dipping into the Social Security or Medicare trust funds.