There seems to be a common misperception that while things are pretty bad, the country survived the Reagan tax cuts, and the Bush tax cuts aren’t that much worse. All that progressives need to do is continue working against any more tax cuts and advocating for adequate appropriations funding, and we'll get through it. This complacency is misplaced and dangerous. The tax cuts, the fiscal condition of the federal government and the states, and the politics are very different. Conservatives have been working on a long-term agenda of shrinking government by reducing revenue. Movement conservative Grover Norquist wants to cut spending on federal programs in half within the next generation; in his words: "kill the taxes and you kill the government."

Initial Internal Revenue Service (IRS) plans to "pre-certify" certain recipients of the Earned Income Tax Credit (EITC) have come under considerable criticism by advocates during the past few months. After agreeing to allow a comment period on the process and the forms, the IRS substantially modified the program. See the IRS press release.

Health care for low-income and disabled people is being slashed as states face their third consecutive year of fiscal crisis. In 2003, almost every state legislature cut benefits, eligibility, or payments to health care providers, according to the National Conference of State Legislatures. In March of 2003, the Center on Budget and Policy Priorities estimated that based on proposed or recently enacted legislation, 1.7 million people would lose coverage, and many others will lose various health benefits such as prescription drugs, dental, vision, and home health care even though they remain insured.

Output data shows some sign of life, but the labor market continues to be weak.