News Columns & Blogs

Tax cuts, recessions main cause of budget shortfall

Though a large majority of Americans blame the nation's budget problems on wasteful spending, "the biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts," the Washington Post reported. "Together, the economy and the tax bills enacted under former President George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue." Other budget busters include the Iraq and Afghanistan wars, which have added $1.3 trillion in new borrowing, and the prescription-drug benefit for Medicare, which added $272 billion. Obama's economic stimulus plan added $719 billion, and the Troubled Asset Relief Program, though much despised, added only $16 billion and may end up paying for itself. "All told, Obama-era choices account for about $1.7 trillion in new debt, according to a separate Washington Post analysis of CBO data over the past decade," the Post reported. "Bush-era policies, meanwhile, account for more than $7 trillion and are a major contributor to the trillion-dollar annual budget deficits that are dominating the political debate."