In 2005, the Center of Budget and Policy Priorities did their own calculations of CBO numbers. 48 percent of the deficit came from tax legislation, 37 percent from defense, international and homeland security, 15 percent from domestic programs.
The new CBO data show that changes in law enacted since January 2001 increased the
deficit by $539 billion in 2005. In the absence of such legislation, the nation would have a surplus this year. Tax cuts account for nearly half — 48 percent — of this $539 billion in increased costs.1 Increases in program spending
make up the other 52 percent and have been primarily concentrated in
defense, homeland security, and international affairs.
The Administration has repeatedly defended its tax cuts as a needed stimulus during the recent economic downturn. But the downturn is behind us, and the cost
of the tax cuts is scheduled to increase in the years ahead. Indeed, some of the tax cuts enacted in 2001 that benefit only highincome households have not even started to take effect yet. The repeal of the “personal exemption phase-out” for high-income taxpayers, as well as repeal of the limitation on itemized deductions for high-income taxpayers, do not start to phase in until 2006 and do not take full
effect until 2010. Estate tax repeal also does not take effect until 2010.
A growing number of studies from highly respected institutions and economists have
concluded that the negative effect on long-term growth of the increased deficits that the tax cuts.
The wealthiest Americans benefitted. The tax cuts didn't create the magic surplus that Bush promised. That is why the Heritage Foundation is attempting to reframe the Bush tax cuts with a chart that makes absolutely no sense.
Actually, the combination of tax cuts and "War on Terror" created the deficit - but what has Obama done to change that? Oh, yeah, INCREASE it.
ReplyDeleteRemember, it was Congress in the 1990's - lead by Newt Gingrich - that balanced the budget. Bill Clinton never recommended a balanced budget.
Now, to betray my party, the budget was balanced in part with Bush 41 "read my lips, whoops, nevermind" tax increase.
Congress needs to repeal some tax cuts and cut a lot of spending.
And it needs to start now.
Coming out of your slumber I see. Actually, if you read Bob Woodward's book The Agenda, Clinton became obsessed with deficit reduction his first year in office. The Perot campaign and economic advisor Robert Rubin affected his viewpoint.
ReplyDeleteBush 41 did the right thing. Unfortunately, that can kill a political career.
Congress needs to repeal some tax cuts and cut a lot of spending.
Agreed, I do think stimulus spending is needed until companies start hiring again.
Side note: thoughts on the Heritage graph. Did they get an intern to make it?