» The trade-off: “On the one hand, if policymakers leave current laws unchanged, the federal debt will probably recede slowly,” said CBO director Douglas W. Elmendorf. “On the other hand, changing current laws to let current policies continue … would boost the economy and allow people to pay less in taxes and benefit more from government programs in the next few years — but put the nation on an unsustainable fiscal course.” That’s a tough one, kids.
» A report full of mediocre news: The Congressional Budget Office’s report on the deficit notes that while the deficits will be smaller over the next decade — by $3.3 trillion over ten years — as a result of the arm-twisting budget deal passed earlier this month, another $3.5 trillion in deficits will be added on top of everything else. Oh, and lest you think that $1.28 trillion is a small amount, it’s only small compared to the prior two years, which were basically the two largest yearly deficits on record. So this total redefines “smaller.”
» Why is this? The CBO’s report says that in regards to what’s behind all this, “Of the various initiatives that the President is proposing, tax provisions would have by far the largest budgetary impact.” In layman’s terms, tax cuts — especially those for the middle class — are the largest factor affecting deficits. While he’s pushing for tax increases on the wealthy and corporations, they won’t offset the effect of the tax cuts. You know what’s funny though? Even though the CBO’s report specifically says this, the Washington Times reported this story as if spending was the culprit.