State governments have had to make tough budget choices in recent years. Tax revenues have stagnated as a result of the poor economy, and that has prompted governors to take a variety of fiscal actions to close large budget gaps. Some governors have cut spending to balance their budgets, while others have pursued large tax increases.
Topic:
Economics, Government, Markets, and Monetary Policy
President Bush has established an advisory panel to study federal tax reform options. The panel is headed by former senators Connie Mack of Florida and John Breaux of Louisiana. Congressional leaders, including House Speaker Dennis Hastert and Majority Leader Tom Delay, have also pledged their support for reform.
The federal government is headed toward a financial crisis as a result of chronic overspending, large deficits, and huge future cost increases in Social Security and Medicare. Social Security and Medicare would be big fiscal challenges even if the rest of the government were lean and efficient, but the budget is littered with wasteful and unnecessary programs.