The federal government’s deficit for the fiscal year ending on October 1 is expected to clock in at $1.3 trillion, the Congressional Budget Office (CBO) estimated on Wednesday.
It’s the fourth consecutive year that politicians in Washington have spent at least $1 trillion that they don’t have.
Five years ago the annual deficit was just $160 billion. Ten years ago, there was a surplus.
The CBO did scale back the nation’s long-term deficit projections, although its rosy predictions (“only” $3.5 trillion in new deficit spending over the next ten years) are based on several unrealistic assumptions.
For example, the CBO assumes that all of the Bush-era income tax cuts (not just those on the “wealthy”) will be repealed in 2012. The data also fails to incorporate an extension of payroll tax relief (which U.S. President Barack Obama has endorsed) as well as the ongoing cost of Obama’s extended unemployment benefits.
Also, the CBO assumes that Congress will take no action to protect the middle class from the dreaded alternative minimum tax – which is rapidly becoming a black hole sucking in millions of America filers and forcing them to pay punitively-high IRS payments.
Obviously we have no problem with Congress taking action to prevent future tax hikes … in fact we’re convinced that additional tax relief (not just preserving the status quo) is vital to turning our nation’s economy around.
Seriously … America’s record deficits didn’t come about as a result of tax cuts, they came about as a result of Republican and Democratic overspending.
Unfortunately, it’s becoming increasingly obvious that the new “Super Committee” in Washington, D.C. is going to propose revenue enhancements (i.e. tax hikes) as part of its deficit reduction plan.