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What’s Driving Projected Deficits?

October 10, 2012 at 10:33 PM

10-10-12bud.JPGKathy Ruffing and Jim Horney just updated their periodic analysis on the main contributors to the large budget deficits projected for the rest of this decade under current policies — and they continue to find that these deficits stem overwhelmingly from the economic downturn, the tax cuts first enacted under President Bush, and the wars in Iraq and Afghanistan.

This update reflects the Congressional Budget Office’s (CBO) latest ten-year budget forecast, issued in August, plus other revisions from CBO and actions by Congress since we last conducted this analysis, in May 2011.

Our projections of deficits and debt under current policies are lower than they were in May 2011, largely because of enactment of the caps on discretionary spending in the Budget Control Act, which cut such funding significantly.

Click here for the full analysis.