State of the Union: Deficits

The president last night pledged to send Congress a budget "that funds the war, protects the homeland, and meets important domestic needs…[while] cutting the deficit in half over the next five years," – an untenable and misleading proposition that ignores the consequences of his tax cuts and the burdens he will place on future generations. If the Bush deficit continues on its current course, the average family's share of national debt will be an astronomical $84,000 – compared to $500 when he took office.

• Calling for unaffordable tax cuts on the wealthy at the same time as promising to cut deficits in half is disingenuous. It hides the fact that large deficits are looming at the end of the 10 year projection horizon. In 2013 alone, 11 years after the recession and 9/11, the tax cuts will be costing us more than $600 billion, including interest.
• Previous administration plans to cut the deficit in half have relied on unrealistic assumptions. Based on realistic assumptions, the deficit will remain at 3 to 4% of GDP for the next decade. Discretionary spending on items outside of homeland security and defense is already too small to leave any room for cuts. Discretionary spending outside of defense and homeland security was less than 5% of total costs for FY03.

Roll back the components of the Bush tax cuts that disproportionately benefit the very wealthiest. "The first step in climbing out of a hole is to stop digging," as the independent Center for Economic Development explains. The administration's suggestion that their tax cuts have been only a minor factor in the fiscal deterioration is flat wrong. The tax cuts are the largest single contributor to the deterioration of our budget outlook, and will continue to impose huge costs in years to come – over $600 billion in 2013 alone, including interest cost.

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