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Pre-2005 Content Archive

Report

Deficit Picture Grimmer Than CBO's March Projections Suggest

Key Findings

  • If the tax cuts are extended and other likely costs occur, deficits will total $4.6 trillion over the next ten years, will never fall below $300 billion in any year, and will exceed $600 billion by 2014.
  • Since January 2001, the budget outlook for the ten years 2002 to 2011 has deteriorated by $8.8 trillion, with projections of surpluses being replaced by projections of large, sustained deficits.
  • In terms of legislation since 2001, tax cuts are the single largest factor behind the move from surpluses to deficits.
Report

CBO Figures Indicate Lower Revenues, Not Higher Spending, Account for the Large Deficit

Key Findings:

In 2004, as a share of the economy:

  • Federal revenues will fall to their lowest level since 1950, during the Truman Administration.
  • Federal spending will be lower than in every year from 1975 through 1996 (and thus will be lower than throughout the administrations of Presidents Carter and Reagan and the first President Bush).

In explaining the shift from a large surplus in 2000 to a large deficit in 2004, the drop in revenues since 2000 accounts for more than three times as much of the fiscal deterioration as the increase in expenditures.