Patricia L Johnson

The Facts Tell the Real Story on Deficit

Through the years I have heard a lot of what I would consider to be “off the wall" remarks coming out of both parties, but I don’t remember ever hearing anything quite so out of touch with reality as the remarks made by ...

Through the years I have heard a lot of what I would consider to be “off the wall" remarks coming out of both parties, but I don’t remember ever hearing anything quite so out of touch with reality as the remarks made by Republican Senators Jon Kyl and Mitch McConnell.

Not one, but both of these Republican Senators, suggested tax cuts do not contribute to the deficit, but spending does, and Senator McConnell went on to suggest that is the view of virtually every Republican.

Senator Jon Kyle - Arizona

“You do need to offset the cost of increased spending. And that’s what Republicans object to. But you should never have to offset the cost of a deliberate decision to reduce tax rates on Americans." 

Senator Mitch McConnell - Kentucky

“There’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue, because of the vibrancy of these tax cuts in the economy. So I think what Senator Kyl was expressing was the view of virtually every Republican on that subject."

I respect everyone’s opinion when it comes to their views on politics and I especially respect Members of Congress, no matter which side of the aisle they’re on, but I cannot have any respect for a person that makes comments that lack truth, or in this case common sense. 

A government report prepared for members of Congress in March of 2010 clearly indicates legislative changes put in place in FY2001-FY2009 created an increase to the deficit in the amount of $5.4 trillion dollars, relative to 2001 baseline projections.  

The data in the March 2010 report was compiled from the Congressional Budget Office, The Budget and Economic Outlook (January 2001 to January 2010), and An Analysis of the President’s Budgetary Proposals (May 2001 to March 2009).

The chart that follows is a breakdown by legislative year.  All figures are in billions of U.S. dollars, and a minus on the chart represents a deficit increase.

http://opinionsplus.files.wordpress.com/2010/07/defcitchart21.jpg

The two legislative changes creating the biggest 10-year increases in deficits were Public Law 107-16 and PL 108-27. 

PL 107-16 Tax Relief Reconciliation Act of 2001, signed into law by President Bush on June 7, 2001, and PL 108-27 Tax Relief Reconciliation Act of 2003 signed into law by President Bush on May 28, 2003, were both major tax cut legislation. When tax cuts are put through they are in effect until the tax laws are changed therefore, any increase/decrease in deficit due to a tax cut will show up for numerous years, not just the year the legislation was enacted. 

What I find most interesting is the Republican claim that tax cuts don’t contribute to the deficit, but spending does.  Both of the following are spending bills.

PL 110-343 Emergency Economic Stabilization Act, enacted October 3, 2008 during the Bush Administration and PL 111-5, American Recovery and Reinvestment Act of 2009, signed into law by President Obama on February 17, 2009. 

PL 110-343 and PL 111-5 increased the 2009 deficit by $509 billion, which is considerably less than the $903 billion added to the 2009 deficit by legislative changes in FY2001-FY2008.

When President Bush came into office we had a budget surplus of $236.2 billion dollars and were expected to have continued surpluses for years to come, that is, until the tax cuts were put into place.

Any political figure that attempts to tell a voter tax cuts did not contribute to our current economic woes are simply trying to brainwash voters.  We were brainwashed once by the Republicans when they took us into war with Iraq.   Remember Iraq – the country that did not have Weapons of Mass Destruction?    The wars in Iraq and Afghanistan have contributed considerably to our current economic situation.  Obviously there are other items that have contributed to the deficit, and I hope to be addressing them in detail in the future..

We were fooled once by the party of “NO"; let us not be fooled once again.  The worse thing that could ever happen to this country is for the Republicans to gain control of either House after the mid-term election. 

Do not let them sway you with their methods of creative accounting.  Learn and understand the facts. 

Article Tags: Legislative Changes, President Bush

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