Federal Debt and Deficit | Center for Effective Government

2008 Fiscal Policy Year in Review

It's been an exceptional year. 2008 saw not only economic indicators that evoked memories of the Great Depression, but also a record-breaking federal budget deficit. The federal government, through several agencies, activated trillions of dollars in loans and asset guarantees. Congress approved the largest supplemental spending bill in its history and gave the Treasury Department the authority to expend the equivalent of three-fourths of the federal discretionary budget on one sector of the economy. But in many other ways, Congress proved to be unremarkable by staying true to its recent history of underachievement.

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U.S. Reaches Debt Limit: The Case for Long-Term Analysis

The Senate will vote soon on legislation to raise the ceiling on the national debt to nearly $10 trillion. This action is imperative as the statutory limit of $8.965 trillion on the United States' level of public debt will be reached by Oct. 1, according to Treasury Secretary Henry Paulson.

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Bush Administration Contradicts Itself on Tax Cuts

A 2006 Bush Treasury Department report debunks many of the recent claims that the President's supporters have made about tax cuts.

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Despite Short-Term Gains, CBO Forecasts Grim Long-Term Fiscal Outlook

On Aug. 17, The Congressional Budget Office (CBO) released the annual summer update to its Budget and Economic Outlook report. In it, CBO lowers its estimate of the Fiscal Year 2006 budget deficit by 30 percent from its March analysis and now projects the year-end deficit at $260 billion. The rosy news, however, did little to assuage analysts' concerns over fiscal challenges looming on the horizon.

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OMB Mid-Session Review Gives Limited Picture Of Budget Crisis

Today, the Office of Management and Budget (OMB) released its annual Mid-Session Budget Review, and has lowered by $127 billion the projected FY 2006 budget deficit - from $423 billion estimated earlier this year to $296 billion. The reduction is attributed to an unexpected rise in corporate and personal income tax receipts and revenues from capital gains taxes. Beneath the increased tax revenue, however, is a frightening reality: the ever-widening gap between the very rich and the rest of us.

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Bush, Congress Hide True Costs of Permanent Tax Cuts

Both the president and Congress have advanced five-year budget plans in 2005. These plans help to mask the true cost of policies to extend the president’s first-term tax cuts permanently, which explode after the current proposed budget window ends in 2010.

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Bush Budget to Increase Deficits $1.6 Trillion over 10 Years

The Congressional Budget Office released its estimates March 5 for the cost of President Bush’s fiscal year 2006 budget, showing deficits increasing by $1.6 trillion over the next 10 years. The CBO report will greatly impact the way the House and Senate budget committees write their FY 06 budget resolutions set for markup this week.

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New OMB Watch Report Views Budget from Nonprofit Perspective

The President’s budget that was released on Feb. 7 is not just austere; it is also frighteningly bleak for nonprofit groups and the people and causes they serve. The President has manufactured a fiscal crisis with massive tax cuts, mainly targeted to the wealthy, that has resulted in federal revenues being reduced to the lowest levels since the 1950s as a percentage of our economy. Cutting revenue to that level means there is drastically less money to fund programs that address community and human need problems, a core function of many nonprofits.

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CBO’s Reduced Deficit Projections Mislead

Last week, the Congressional Budget Office (CBO) released an updated Budget and Economic Outlook with new 10-year deficit projections for 2006–2015. The report estimated 10-year deficits to have dropped from $2.3 trillion to $1.4 trillion since last September, a 39 percent decrease. These conclusions, however, are very misleading.

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Halving the Deficit Will Involve Major Changes—or ‘Fuzzy Math’

Anybody who listened to President Bush speak during his campaign heard a few specific messages reiterated again and again, loud and clear. One addressed the federal budget deficit, which at 3.6 percent of GDP (gross domestic product) in 2004 was the highest it has been in over a decade. Bush has vowed to halve the deficit by 2009. He repeated this promise in a December press conference, stating he will cut the deficit in half while continuing to pursue both making the 2001 and 2003 tax cuts permanent and providing “every tool and resource for our military.”

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