WASHINGTON – Rep. Benjamin L. Cardin charged today that new economic projections that were released today confirm that the $1.3 trillion tax cut has "raided the Medicare surplus by $29 billion and now threatens Congress’ ability to strengthen the Social Security and Medicare programs."

In response to an Office of Management and Budget (OMB) report released today on the budget surplus, Rep. Cardin said the projected $281 billion surplus of six-months ago has declined by almost half, making it even more difficult to deal with the long-term financial needs of Social Security and Medicare. As the baby boom generation ages, the number of individuals over age 65 is expected to almost double by 2030.

"The slowing economy has shrunk the projected budget surplus, demonstrating the riskiness of the Bush Administration's $1.3 trillion tax cut. Only six months ago projections showed a $125 billion surplus in non-trust fund monies. But that has now eroded the non-trust fund surplus to just $1 billion," said the Congressman. In proposing his tax cut, President Bush vowed to use only non-trust fund surplus money to fund it and other spending priorities.

Such a decline in the surplus, said Rep. Cardin, has forced the administration to raid the Medicare surplus to pay for the tax cut, and is likely to force the use of surpluses reserved for strengthening Social Security to pay for the tax cut, education, defense spending and other priorities that the President has targeted.

"When the tax cut passed, many economists warned there would be problems because economic projections were notoriously unreliable and because the tax cut would wipe out any cushion against an economic slowdown. Unfortunately, we are all now witnessing the effect of the president’s poor judgment."