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Repeat After Me: Tax Cuts Not Primarily Responsible for Large Deficits

Advocates of bigger government repeatedly urge repeal of the three federal tax cuts enacted in 2001, 2002, and 2003, saying the tax cuts have been the primary cause of the current federal deficits. They bolster their argument by pointing out that in 2001 the the Congressional Budget Office (CBO) projected a cumulative surplus of $5.6 trillion for fiscal years 2002-2011, but now estimates a $2.9 trillion deficit for the same period, and blame the tax cuts for the deficit. Not so says Congress' Joint Economic Committee (JEC) in a report dated June 1, 2004. (Requires Adobe Reader).

According to the JEC, the tax cuts account for only 24% of the change in projections. The major cause for reducing the suplus was a weak economy. In addition, the JEC attributes increased spending to a 36% reduction in the surplus. They also emphasize that "Deficits would have occurred even in the absence of the tax cuts."

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