The government is adamant about not accepting any reductions in the RD$238.5 billion budget it has submitted to Congress. This is RD$32 billion more than the actual spending of 2005. As a result, the country is operating on the 2005 budget, which will mean a windfall of surplus revenues that the government will be able to manage at discretion, especially after it postponed starting the Free Trade Agreement with the US. As a result, the government now is benefiting from keeping the 13% exchange surcharge and all the new taxes that were created with the 2006 fiscal reform supposedly to compensate for eliminating the 13% exchange surcharge.
At no time has the government considered making reductions in its reportedly high level of spending, despite there is ample room for austerity cuts. As reported in El Caribe, the Fernandez government spent RD$38.8 billion more in 2005 than in 2004, or approximately 36% more. The government spent RD$147.6 billion in 2005, compared to RD$108.7 billion in 2004, already a record year in spending.
The current expenditures represented RD$116.6 billion in 2005, compared to RD$89.9 billion in 2004, or RD$26.7 billion more. Capital investments were RD$30.9 billion last year, in contrast with RD$18.8 billion in 2004.