The revised deficit numbers reported Tuesday by the Congressional Budget Office and the Office of Management and Budget predict higher deficits for 2010 and beyond.
As expected, Republicans are already blaming Obama for the worsening budget numbers and you can be sure that budget deficits will be the focus of Republican talking points in the 2010 Congressional elections and the 2012 Presidential election.
So it is important that we set the record straight. Via Center for American Progess,
The policies of the Bush administration, which included tax cuts during a time of war and a floundering economy, are clearly the primary source of the current deficits. The Obama administration policies that are beginning to give the economy a needed jumpstart—the American Recovery and Reinvestment Act in particular—place a distant third in contributing to the 2009 and 2010 deficit numbers.
Here is a handy chart showing the relative contribution to the deficit:
If Bush had not cut taxes while prosecuting two foreign wars and adopting other programs without paying for them, “the current deficit would be only 4.7 percent of gross domestic product this year, instead of the eye-catching 11.2 percent—despite the weak economy and the costly efforts taken to restore it. In 2010, the deficit would be 3.2 percent instead of 9.6 percent.”
Of course, whether the budget picture improves depends on how the economy fares in the next few years. If the stimulus package helps to generate economic growth that will produce more tax revenue and smaller deficits—it will have been money well spent.
Tags: Bush Administration Budget Deficits, CBO Budget deficit 2010
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