Statement from James Horney on CBO’S Budget Estimates
Update: The numbers in the third bullet from the excerpted statement below have been updated to reflect corrections.
Today, we released this statement from Jim Horney on the Congressional Budget Office's new budget and economic estimates:
"The Congressional Budget Office’s new report on the budget and economic outlook suggests three important points that might be lost in the current cacophony of calls to slash federal domestic programs immediately. A careful reading of the CBO report makes it clear that:
The economic recovery remains anemic, with the unemployment rate expected to remain above 8 percent through 2012. Thus, implementing big cuts in federal spending (or big increases in broad-based taxes) now would weaken the economy and further slow the already sluggish pace of economic growth, sacrificing many jobs.
Policymakers could significantly reduce the real risk that rising deficits and debt will pose later this decade simply by following current law and allowing the 2001 and 2003 tax cuts to expire at the end of 2012, as scheduled.
While CBO’s projection of the 2011 deficit is higher than its projection last August, this change does not reflect 'runaway spending.' The $475 billion cost in 2011 of December’s bipartisan tax cut-unemployment insurance deal and small business legislation enacted in September account for more than the entire $414 billion increase in CBO’s 2011 deficit projection. These two bills consisted overwhelmingly of tax cuts; spending provisions account for only $67 billion (14 percent) of their cost."
Read the rest of the statement here. And, here's a chart showing what will happen to federal debt if the 2001 and 2003 tax cuts are extended beyond 2012: